Income Tax Officer Ward-52(3), Kolkata V. Ramesh Kr. Jajodia, Kolkata

ITA 2166/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99853 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2015
• Appeal Filed By: Department
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 22-07-2013
• Court: TRIBUNAL
• Department Lawyers: SANJIT KR DAS
• Assessee Lawyers: I BAN ERJEE
• Keywords: Speculation loss
• Section: 43(5); 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI WASEEM AHMED , AM] I.T.A NO.2166/KOL/2013 ASSESSMENT YEAR: 2009-10 INCOME-TAX OFFICER, WD-52(3), KOLKATA. VS. RAMESH KR. JAJODIA, KOLKATA (PAN: ADUPJ4066G) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 17.09.2015 DATE OF PRONOUNCEMENT: 07.10.2015 FOR THE APPELLANT: SHRI SANJIT KR. DAS, JCIT, SR. DR FOR THE RESPONDENT: SHRI I. BANERJEE, FCA ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XXXIII, KOLKATA IN APPEAL NO.65/CIT(A)-XXXIII/ITO-WARD-52(3),KOL/11-12 DATED 02.05.2013. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGA INST THE ORDER OF CIT(A) IN ALLOWING CARRY FORWARD SPECULATION LOSS TRANSACTION NOT CLAIMED IN THE ORIGINAL RETURN AND THE RETURN WAS NOT FILED U/S.139(1) BUT FILED U /S. 139(4) OF THE ACT. FOR THIS, REVENUE HAS RAISED FOLLOWING TWO GROUNDS: 1. THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE THE CIT(A) ERRED IN ALLOWING THE CARRY FORWARD OF THE LOSS OF SPECULATIVE TRANSACTIO NS OF RS.17,35,409/- NOT CLAIMED IN THE ORIGINAL RETURN. 2. THAT ON THE FACTS AND IN CIRCUMSTANCES OF THE C ASE THE CIT(A) ERRED IN APPRECIATING THE RETURN CLAIMING LOSS FILED MUCH AFTER THE EXPIR Y OF THE DUE DATE SPECIFIED U/S. 139(1) AND HENCE NO CARRIED FORWARD AND SET OFF OF LOSS IS PERMISSIBLE. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE RELEVANT Y 2009-10 ON 20.09.2009 U/S. 139(1) OF THE ACT THROUGH E-FILING. THE ASSESSEE GOT HIS ACCOUNTS AUDITED U/S. 44AB OF THE ACT AND A CCORDINGLY, THE DUE DATE FOR FILING OF RETURN FALLS ON 30.09.2009 WHEREAS HE HAS FILED RET URN ON 20.09.2009. THE ASSESSEE DISCLOSED LOSS U/S. 43(5) OF THE ACT, FROM DERIVATI VES/SPECULATIVE TRANSACTION AT RS.17,35,409/-. THE ASSESSEE HAS NOT CLAIMED THIS LOSS IN THE ORIGINAL RETURN OF INCOME BUT TOTAL INCOME WAS WORKED OUT ON THE BASIS OF POS ITIVE INCOME. THIS RETURN WAS NOT PROCESSED U/S. 143(1) OF THE ACT BY CPC, BANGALORE ACCEPTED THE ACKNOWLEDGMENT OF 2 ITA NO.2166/K/2013 RAMESH KR. JAJODIA AY 2009-10 RETURN OF INCOME. SUBSEQUENTLY, AFTER NOTICING THE OMISSION TO INCORPORATE AND TO GIVE EFFECT TO THE LOSSES U/S. 43(5) OF THE ACT AMOUNTIN G TO RS.17,35,409/- FROM DERIVATIVE/SPECULATIVE TRANSACTION WAS INCORPORATED IN THE RETURN OF INCOME AND THE RETURN WAS REVISED U/S. 139(5) OF THE ACT ON 22.12. 2009 WHICH WAS AGAIN REVISED ON 21.03.2010. THE CPC, BANGALORE VIDE ITS INTIMATION U/S. 143(1) OF THE ACT VIDE DOCUMENT NO. CPC/0910/14/1004179889 DATED 16.09.201 0 ALLOWED THE SHORT TERM CAPITAL LOSS OF RS.17,43,793/- BUT NO EFFECT WAS GI VEN TO THE SPECULATIVE LOSS CLAIMED FROM DERIVATIVES/SPECULATIVE TRANSACTION AT RS.17,3 5,409/- U/S. 43(5) OF THE ACT. ACCORDINGLY, ASSESSEE MOVED RECTIFICATION APPLICATI ON, WHICH WAS ALSO REJECTED BY THE ACIT, CPC, BANGALORE. CONSEQUENTLY DERIVATIVE LOS S/SPECULATIVE LOSS DERIVED U/S. 43(5) OF THE ACT WAS DENIED. AGGRIEVED, ASSESSEE P REFERRED APPEAL BEFORE CIT(A), WHO ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING IN P ARA 7 AS UNDER: 7. CONSIDERING THE ABOVE FACTS, I AM OF THE VIEW, THAT CLERICAL/TYPOGRAPHICAL MISTAKE IN FILLING OF COLUMNS WHILE FILING THE RETURN SHOULD N OT DEPRIVE THE APPELLANT BENEFIT OF CARRYING FORWARD A LOSS FOR WHICH HE IS OTHERWISE E NTITLED. AT MOST IT COULD BE SAID THAT THE COLUMNS OF THE RETURN HAVE NOT BEEN FILLED IN P ROPERLY. AS PER PROVISION OF SECTION 139(9), WHERE A RETURN FURNISHED BY THE ASSESSEE IS CONSIDERED TO BE DEFECTIVE, THE ASSESSING OFFICER MAY INTIMATE THE DEFECT TO THE AS SESSEE GIVING HIM OPPORTUNITY TO REMOVE THE SAME WITHIN FIFTEEN DAYS OR FURTHER TIME ALLOWED. CLAUSE (A) TO THE EXPLANATION TO THE SAID SUB-SECTION CLARIFIES THAT UNLESS NECESSARY STATEMENTS AND COLUMNS IN THE RETURN HAVE BEEN DULY FILL IN, THE R ETURN CAN BE TREATED AS DEFECTIVE. THEREFORE, MY OPINION THIS WAS A CASE OF DEFECT.IVE RETURN AND THE APPELLANT SHOULD HAVE BEEN GIVEN OPPORTUNITY TO REMOVE THE DEFECT BY FILL ING IN THE RELEVANT SCHEDULES IN A CORRECT MANNER. THE ACIT (CPC) ON THE OTHER HAND ST RAIGHT AWAY DISALLOWED THE CLAIM FOR LOSS AND ALSO REJECTED THE APPLICATION FOR RECT IFICATION, WHICH, FOR THE REASONS DISCUSSED ABOVE, IS NOT PROPER. THE ASSESSING OFFIC ER IS THEREFORE DIRECTED TO OBTAIN A CORRECTED COMPUTATION OF RETURNED INCOME FROM THE A PPELLANT AND ALLOW CARRY FORWARD OF THE LOSS AS PER LAW. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. FIRST OF ALL WE FIND THAT THE ORIGINAL R ETURN FILED BY THE ASSESSEE U/S. 139(1) OF THE ACT WAS WITHIN THE TIME ALLOWED I.E. ON OR BEFO RE 30.09.2009 BEING TAX AUDIT REPORT WAS FILED ON 20.09.2009. THE ASSESSEE REVISED THE R ETURN FINALLY ON 21.03.2010 I.E. WITHIN THE TIME ALLOWED U/S. 139(5) OF THE ACT. EV EN OTHERWISE, THIS DISALLOWANCE OFF LOSS CLAIMED IN SPECULATIVE TRANSACTIONS U/S. 143(5 ) OF THE ACT CANNOT BE DISALLOWED BY ACTING U/S. 143(1) OF THE ACT. BECAUSE THIS IS A H IGHLY DEBATABLE ISSUE AND DEBATABLE ISSUE CANNOT BE ADJUDICATED WHILE PASSING INTIMATIO N U/S. 143(1) OF THE ACT. 3 ITA NO.2166/K/2013 RAMESH KR. JAJODIA AY 2009-10 ACCORDINGLY ON MERITS, THE CIT(A) RIGHTLY DELETED T HE ADDITION. FURTHERMORE, WE ARE OF THE VIEW THAT EVEN THIS BEING A HIGHLY DEBATABLE IS SUE NO DISALLOWANCE CAN BE MADE WHILE PASSING INTIMATION U/S. 143(1) OF THE ACT. H ENCE, THIS APPEAL OF REVENUE IS DISMISSED. 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. 6. ORDER IS PRONOUNCED IN THE OPEN COURT ON 07.10.2 015 SD/- SD/- (WASEEM AHMED) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 07TH OCTOBER, 2015 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT ITO, WARD-52(3) , KOLKATA. 2 RESPONDENT SHRI RAMESH KR. JAJODIA, 57/1, KALITAL A LINK ROAD, NORTH, PURBANCHAL, KOLKATA-700078 . 3 . THE CIT(A), KOLKATA 4. 5. CIT KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .