V.B.Vijaya Kumar, CHENNAI V. ITO Non Corporate Ward 22(5), Tambaram

ITA 2525/CHNY/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 9087 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 29-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income; Transactions in derivatives
• Section: 139; 143(3); 139(1)

Judgement Text

आयकर अपीलीय अिधकरण, ‘बी’ (एस एम सी) ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ (SMC) BENCH, CHENNAI Įी महावीर ͧसंह, उपाÚय¢ के समᭃ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT आयकर अपील सं./ITA No.: 2525/CHNY/2018 िनधाᭅरण वषᭅ /Assessment Year: 2015-16 Shri V.B. Vijaya Kumar, No.2/694, 1 st Main Road, V.G.P. Vimala Nagar, Medavakkam, Chennai – 600 100. PAN : ADKPV 2502K v. The Income Tax Officer, Non-Corporate Ward-22(5), Tambaram, Chennai. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri Arjun Raj, CA ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri B. Sajive, JCIT स ु नवाई कȧ तारȣख/Date of Hearing : 09.11.2021 घोषणा कȧ तारȣख/Date of Pronouncement : 09.11.2021 आदेश /O R D E R This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals)-10, Chennai, in ITA No. 32/17-18/CIT(A)-10 vide order dated 29.06.2018. The Assessment was framed by ITO, Non-Corporate Ward-22(5), Tambaram, Chennai for the assessment year 2015-16 vide order dated 30.09.2017 U/s 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’). 2 I.T.A. No.2525/Chny/2018 2. The first issue in this appeal of assessee is against the order of CIT(A) confirming the action of AO in sustaining the disallowance of brought forward loss of Rs.4,09,000/- under the head ‘business’ in the computation of trading, profit / speculation profit pertaining to transactions entered by assessee with M/s. Religare Securities Ltd., without proper reasons. For this, the assessee has raised Ground Nos.1 to 5, which need not be reproduced. 3. Brief facts are that the AO during the course of assessment proceedings noticed that the assessee has carried out large value of share transactions in derivatives in recognized stock exchange but no business income has been declared by the assessee. The assessee vide letter dated 12.06.2017 explained that income from business was disclosed as income from share trading and from towards commission received from M/s. Religare Securities Ltd., for an amount of Rs.63,780/-. The assessee during the course of assessment proceedings also claimed loss of Rs.4,09,000/- by stating as under:- “On perusal of the IT Return submitted for the relevant year, we observe that we have inadvertently omitted to claim the loss on shares in the main income tax return made systematic error in filing in Form No.2 and we wish to exphasize that it is unintentional and technical error in filing. ................... In view of the same, we request you to 3 I.T.A. No.2525/Chny/2018 consider for writing off the profit on sale of shares against this previous year losses as per the documentary proof submitted along with the statement of income.” The AO noted that the assessee has file return of income for assessment year 2014-15 in Form No.2 i.e., non-business return and no claim or no evidence regarding sale of shares was made in that return or no loss was claimed. But, now the assessee is claiming set off of this loss of Rs.4,09,000/- being brought forward loss in trading of shares. The AO disallowed the claim of loss by stating that there has been no voluntary disclosure in return of income filed for assessment year 2014-15 about the share transactions and loss incurred and therefore, the claim was rejected. Aggrieved, the assessee preferred an appeal before the CIT(A). 4. Before the CIT(A), the claim of assessee by observing in Para 5.3.3 & 5.3.4 of his appellate order is as under:- “5.3.3. During the appellate proceedings also, the appellant made similar submissions as was made before the AO during the assessment proceedings. The submissions made are duly considered. In this regard it is to state that the provisions of Section 139(1) of the Act require every person to furnish the return of income relating to the previous year, in the prescribed form and verified in the prescribed manner, setting forth such particulars as may be prescribed, on or before the due date of filing the return of income. Further under section 139(3) of the Act it is provided that where any person had sustained loss in 4 I.T.A. No.2525/Chny/2018 any previous year under the head ‘profits and gains’ of business, or ‘capital gains’ and claimed that such loss is to be carried forward under section(s) 72(1)/72(2)/74(1)/ 74(3)/74A(3) of the Act may furnish return of loss in the prescribed form and verified in the prescribed manner, within the time allowed under sub-section (1) to section 139 of the Act. Consequently a return of loss is to be filed by any person within the time prescribed for filing the return of income under section 139(1) of the Act in order to claim the carry forward loss. 5.3.4 In the instant case, as mentioned by the AO, it is an undisputed fact that the appellant had not disclosed the details of loss in share trading in the return filed for the AY 2014-15. Against the given facts and circumstances, since the essential requirement for allowing any claim of brought forward loss is to disclose the same in a return to be filed by the appellant u/s 139(1) of the Act and since in the instant case, the appellant had not complied with the essential condition, I am, therefore in agreement with the AO’s action of rejection of the claim of brought forward loss made by the appellant. Accordingly the ground raised by the appellant on this issue is treated as Dismissed.” 5. I have heard rival contentions and gone through facts and circumstances of the case. Admitted facts are that the assessee for assessment year 2014-15 has filed return in Form No.2 i.e., non-business return. Admittedly, the assessee has not disclosed any share transaction and no loss was claimed in that return. Now, in assessment year 2015-16, the assessee is claiming brought forward loss in trading of shares amounting to Rs.4,09,000/- pertaining to assessment year 2014-15 for set off against gains earned from share trading in the relevant 5 I.T.A. No.2525/Chny/2018 assessment year to the extent of Rs.3,82,934/-. I’m in agreement with the findings of the CIT(A) that once there is no brought forward loss disclosed in the return of income filed by the assessee u/s.139(1) of the Act, the assessee has not complied the basic condition and hence, the CIT(A) has rightly dismissed the claim of the assessee. I uphold the order of CIT(A) and this issue of assessee’s appeal is dismissed. 6. The next issue in this appeal of assessee is as regards to the order of CIT(A) in restricting the expenses to the extent of Rs.63,780/- as against claimed by the assessee to the tune of Rs.95,190/- and thereby disallowing the claim of loss to the tune of Rs.31,410/-. For this, the assessee has raised Ground Nos. 6 to 9, which need not be reproduced. 7. I have heard rival contentions and gone through facts and circumstances of the case. I noted that the AO restricted the claim of expenses exclusively taken up for the purpose of brokerage expenses and to the extent of commission receipt. The CIT(A) also confirmed the action of AO, as the assessee could not file any details before him. For this, the CIT(A) observed in para 6.3.3 as under: 6 I.T.A. No.2525/Chny/2018 6.3.3 The submissions are duly considered. The AR was asked to furnish the details of expenses claimed to the extent of Rs. 95,190/- during the appellate proceedings. However, vide his appearance on 20-6-2018, it was submitted by the AR that he was unable to furnish the details of expenses claimed with supporting documents. Under these circumstances, in the absence of details filed to adjudicate on the allowability of the expenses claimed as incurred for business by the appellant, I am constrained to uphold the restriction of expenses by the AO from Rs.95,190/- to Rs.63,780/- as reasonable and thus dismiss the ground of appeal filed. Aggrieved, the assessee came in second appeal before Tribunal. 8. I noted that even now, the assessee could not adduce anything before me and hence, I find no infirmity in the order of CIT(A). I confirm the order of CIT(A) and this issue of assessee’s appeal is dismissed. 9. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 9 th November, 2021 at Chennai. Sd/- (महावीर ͧसंह ) (Mahavir Singh) उपाÚय¢ /Vice President चे᳖ई/Chennai, ᳰदनांक/Dated, the 9 th November, 2021 RSR आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ (अपील)/CIT(A) 4. आयकर आयुᲦ /CIT 5. िवभागीय ᮧितिनिध/DR 6. गाडᭅ फाईल/GF.