VIPUL P. DALAL, MUMBAI V. DCIT 12(2), MUMBAI

ITA 7761/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2727 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 19-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 30-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJN EESH K ARVIND
• Assessee Lawyers: DEEPAK N KAN ABAR
• Keywords: Salary income; Revised return
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA NO. 7761/MUM/2014 (ASSESSMENT YEAR: 2008-09) SHRI VIPUL P. DALAL VS. D C I T - 12(2 ) 11, SADHANA, B ROAD 32, CHURCHGATE MUMBAI 400020 A AYAKAR BHAVAN M.K. ROAD MUMBAI 400020 PAN - AACPD1495Q APPELLANT RESPONDENT APPELLANT BY: SHRI DEEPAK N. KANABAR RESPONDENT BY: SHRI RAJNEESH K. ARVIND DATE OF HEARING: 19.09.2016 DATE OF PRONOUNCEMENT: 23.09.2016 O R D E R PER JASON P. BOAZ, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)- 23, MUMBAI DATED 07.10.2014 FOR A.Y. 2008-09. 2. THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER: - 2.1 THE ASSESSEE FILED HIS RETURN OF INCOME FOR A.Y . 2008-09 DECLARING INCOME OF ` 1,22,09,311/- AND CLAIMED CARRY FORWARD OF BUSINESS LOSS OF ` 5,04,26,202/-. THE BREAKUP OF INCOME IS AS UNDER: - (A) SALARY INCOME ` 61,90,000/- (B) BUSINESS LOSS ( ` 5,04,26,202/-) (C) SHORT TERM CAPITAL GAINS ` 44,12,003/- (D) INCOME FROM OTHER SOURCES ` 11,76,849/- (E) LONG TERM CAPITAL GAINS ` 1,60,121/- (E) INCOME FROM HOUSE PROPERTY ` 3,80,338/- IN THE RETURN OF INCOME, THE ASSESSEE DID NOT SET OFF THE BUSINESS LOSS OF ` 5,04,26,202/- AGAINST CURRENT YEARS INCOME FROM OTH ER HEADS BUT CARRIED FORWARD THE SAME TO THE SUBSEQUENT YEAR. ITA NO. 7761/MUM/2014 SHRI VIPUL P. DALAL 2 2.2 THE RETURN WAS PROCESSED UNDER SECTION 143(1) O F THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') ON 10.12.2009 WHEREIN THE INCOME OF THE ASSESSEE WAS DETERMINED AT ` 1,23,19,310/-. AS RETURNED BY THE ASSESSEE, THE ASSESSING OFFICER (AO) ALSO PROCESSED THE RETURN OF INCOME UNDER SECTION 143(1) OF THE ACT WITHOUT SETTING OFF THE CURRENT B USINESS LOSS AGAINST INCOME FROM OTHER HEADS. THE CASE WAS NOT SELECTED FOR SCRUTINY IN THIS YEAR AND THEREFORE THE ORDER UNDER SECTION 143(1) O F THE ACT DATED 10.12.2009 WAS FOR ALL PURPOSES AND INTENT THE ASSE SSEES ORDER OF ASSESSMENT FOR A.Y. 2008-09. 2.3 LATER, VIDE LETTER DATED 26.06.2012 ADDRESSED T O THE AO, THE ASSESSEE SOUGHT RECTIFICATION OF THE ORDER OF ASSESSMENT FOR A.Y. 2008-09 DATED 10.12.2009 UNDER SECTION 154 OF THE ACT, CLAIMING T HAT THERE WERE CERTAIN MISTAKES APPARENT FROM THE RECORD. IT WAS SUBMITTED BY THE ASSESSEE THAT WHILE VERIFYING THE ORDER OF ASSESSMENT UNDER SECTI ON 143(1) OF THE ACT AND COMPUTATION OF TAX LIABILITY, HE REALIZED (I) THAT HE HAD NOT SET OFF BUSINESS LOSS AGAINST OTHER HEADS OF INCOME, I.E. INCOME FRO M OTHER SOURCES, HOUSE PROPERTY, LONG TERM CAPITAL GAINS AND SHORT TERM CA PITAL GAINS. A REVISED COMPUTATION OF INCOME WAS ENCLOSED AND IT WAS SUBMI TTED THAT THE BUSINESS LOSS OF ` 5,04,26,202/- INCURRED DURING THE YEAR IS TO BE ALL OWED TO BE SET OFF BY THE ASSESSING OFFICER; AND (II) THAT INTEREST U NDER SECTION 234C OF THE ACT WAS WRONGLY CHARGED IN THE ORDER OF ASSESSMENT. THE AO, AFTER CONSIDERING THE AVERMENTS OF THE ASSESSEE, IN HIS ORDER DATED 2 2.08.2012 OBSERVED THAT AS PER THE RETURN OF INCOME FILED FOR A.Y. 2008-09, THE ASSESSEE HAD DECLARED TOTAL INCOME OF ` 1,22,09,311/- AND HAD NOT CLAIMED SET OFF OF BUSINE SS LOSS OF ` 5,04,26,202/-. FURTHER, SINCE NO SUCH CLAIM WAS PUT FORTH BEFORE THE AO, AND THE RETURN OF INCOME WAS PROCESSED UNDER SE CTION 143(1) OF THE ACT IN ACCORDANCE WITH THE RETURN OF INCOME FILED FOR A .Y. 2008-09, THERE WAS NO MISTAKE APPARENT ON RECORD IN THE ORDER OF ASSESSME NT. IN THAT VIEW OF THE MATTER, THE AO REJECTED THE ASSESSEES APPLICATION FOR RECTIFICATION UNDER SECTION 154 OF THE ACT ON BOTH THE ISSUES RAISED. 2.4 AGGRIEVED BY THE ORDER UNDER SECTION 154 OF THE ACT DATED 22.08.2012 FOR A.Y. 2008-09 PASSED BY THE AO REJECTING HIS REC TIFICATION APPLICATION ITA NO. 7761/MUM/2014 SHRI VIPUL P. DALAL 3 DATED 22.08.2012, THE ASSESSEE FILED AN APPEAL BEFO RE THE CIT (APPEALS)-23, MUMBAI MAKING SUBMISSIONS VIDE LETTER DATED 08.09.2 014 WHICH ARE EXTRACTED IN THE IMPUGNED ORDER OF THE LEARNED CIT( A). THE LEARNED CIT(A) DISMISSED THE ASSESSEES APPEAL VIDE THE IMPUGNED O RDER DATED 07.10.2014 HOLDING AS UNDER AT PARAS 2.4 TO 2.6 THEREOF: - 2.4 I HAVE CONSIDERED THE FACTS OF THE CASE AND T HE SUBMISSIONS MADE BY THE ASSESSEE. IT IS PERTINENT TO NOTE THAT THE RETURN OF INCOME OF THE ASSESSEE FOR THE A.Y. 2008-09 WAS PROCESSED UNDER SECTION 143(1) OF THE ACT AND NO ORDER UNDER SECTION 143(3) WAS PASSED. IN ORDER TO DECIDE THE ISSUE, IT WOULD BE IMPERATIVE T O EXAMINE THE PROVISIONS OF SECTION 143(1) OF THE I.T. ACT, 1961. THE SAID PROVISION, INSOFAR AS IS RELEVANT TO THE PRESENT APPEAL READS AS FOLLOWS:- [1] WHERE A RETURN HAS BEEN MADE UNDER SECTION 139, OR IN RESPONSE TO A NOTICE UNDER SUB-SECTION (1) OF SECTI ON 142, SUCH RETURN SHALL BE PROCESSED IN THE FOLLOWING MANNER, NAMELY: - (A) THE TOTAL INCOME OR LOSS SHALL BE COMPUTED AFT ER MAKING THE FOLLOWING ADJUSTMENTS, NAMELY:- (I) ANY ARITHMETICAL ERROR IN THE RETURN; OR (II) AN INCORRECT CLAIM, IF SUCH INCORRECT CLAIM IS APPA RENT FROM ANY INFORMATION IN THE RETURN; (B) THE TAX AND INTEREST, IF ANY, SHALL BE COMPUTE D ON THE BASIS OF THE TOTAL INCOME COMPUTED UNDER CLAUSE (A); 2.5 FROM THE ABOVE, IT WOULD BE CLEAR THAT WHILE P ROCESSING THE RETURN, THE ASSESSING OFFICER CAN MAKE THE ADJUSTME NT TO THE TOTAL INCOME RETURNED ONLY ON ACCOUNT OF ANY ARITHMETICAL ERROR IN THE RETURN OR ON ACCOUNT OF AN INCORRECT CLAIM. NOT CLAIMING O F SET OFF OF BUSINESS LOSS AGAINST INCOMES UNDER THE OTHER HEADS IS NOT A N ARITHMETICAL ERROR AND IT IS ALSO NOT IN THE NATURE OF AN INCORRECT CL AIM. HENCE, NO ADJUSTMENT TO THE TOTAL INCOME OF THE ASSESSEE COUL D HAVE BEEN CARRIED OUT BY THE ASSESSING OFFICER WHILE PROCESSING THE R ETURN UNDER SECTION 143(1) OF THE I.T. ACT, 1961. THE ASSESSING OFFICER WAS NOT UNDER ANY OBLIGATION UNDER THE ACT TO ALLOW THE SET OFF OF TH E BUSINESS LOSS SINCE HE COULD HAVE MADE ADJUSTMENT TO THE RETURNED INCOM E ONLY IN TERMS OF THE ITEMS SPECIFIED IN SECTION 143(1)(A)(I) AND (II ) OF THE I.T. ACT, 1961. THEREFORE, THERE WAS NO MISTAKE APPARENT FROM THE R ECORDS IN THE INTIMATION UNDER SECTION 143(1) OF THE I.T. ACT, 19 61 WITHIN THE MEANING OF SECTION 154 OF THE I.T. ACT, 1961. 2.6 IN VIEW OF THE AFORESAID REASONS, THE ACTION OF THE ASSESSING OFFICER OF REJECTING THE APPLICATION MADE BY THE AS SESSEE UNDER SECTION 154 OF THE I.T. ACT, 1961, BEING AS PER LAW, IS UPH ELD. THE GROUND OF APPEAL FILED BY THE ASSESSEE IS DISMISSED. ITA NO. 7761/MUM/2014 SHRI VIPUL P. DALAL 4 3.1 AGGRIEVED BY THE ORDER OF THE CIT(A)-23, MUMBA I DATED 07.10.2014, THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL RAISING THE FOLLOWING GROUNDS: - 1. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A)/A.O. ERRED IN NOT ALLOWING A SET-OFF OF BUSI NESS LOSS OF RS.5,04,26,202 AGAINST OTHER HEADS OF INCOME (EXCEP T SALARY) TOTALLING TO RS.61,29,311. 2. THAT THE ASSESSEE INADVERTENTLY OMITTED TO CLAIM THE SET-OFF IN THE RETURN OF INCOME AND SUBSEQUENTLY THE AO REJECTED T HE APPLICATION U/S 154 FOR RECTIFICATION OF ASSESSMENT FOR ALLOWING SET-OFF OF BUSINESS LOSS AGAINST OTHER HEADS OF INC OME. 3.2.1 THE LEARNED A.R. FOR THE ASSESSEE WAS HEARD I N SUPPORT OF THE GROUNDS RAISED AND REITERATED THE SUBMISSIONS PUT FORTH IN PROCEEDINGS BEFORE THE CIT(A) VIDE LETTER DATED 18.09.2014. IT WAS SUBMITT ED THAT SECTION 154 OF THE ACT PERMITS RECTIFICATION OF AN ORDER EITHER ON THE SUO MOTO ACTION OF THE AUTHORITY CONCERNED OR WHERE ANY SUCH MISTAKE APPAR ENT ON THE FACT OF THE RECORD IS BROUGHT TO THE NOTICE OF THE AUTHORITY CO NCERNED, INTER ALIA, BY THE ASSESSEE. ACCORDING TO THE LEARNED A.R. FOR THE ASS ESSEE, IN THE CASE OF HAND, IN THE COMPUTATION ATTACHED WITH THE RETURN O F INCOME FOR A.Y. 2008- 09, THE ASSESSEE HAS RETURNED LOSS OF ` 5,04,26,202/- BUT HAD INADVERTENTLY NOT SET OFF THE SAME AGAINST OTHER HEADS OF INCOME, I.E. INCOME FROM HOUSE PROPERTY AND OTHER SOURCES. IT IS CONTENDED THAT SI NCE THE RETURNED BUSINESS LOSS OF ` 5,04,26,202/- HAS BEEN ALREADY ACCEPTED BY THE AO W HILE PROCESSING THE RETURN OF INCOME UNDER SECTION 143(1 ) OF THE ACT VIDE ORDER DATED 10.12.2009, THE BUSINESS LOSS HAS TO BE MEREL Y SET OFF AGAINST OTHER HEADS OF INCOME, EXCEPT INCOME FROM SALARY AND THIS REQUEST FOR RECTIFICATION, IF ACTED ON BY THE AO, WOULD NEITHER REQUIRE REFERENCE TO ANY OTHER DOCUMENTS/ORDERS NOR WOULD IT BE A DEBATABLE ISSUE THAT REQUIRES ANY LONG DRAWN DISCUSSION OR DEBATE. IT WOULD BE MERELY BE RECTIFYING A MISTAKE APPARENT FROM THE FACE OF THE RECORD SINCE THERE IS NO ESTOPPAL AGAINST OPERATION OF THE STATUTE. 3.2.2 IN SUPPORT OF THE ABOVE AVERMENTS, THE ASSESS EE, INTER ALIA, PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS/C BDT CIRCULARS, ETC.: - (I) CBDT CIRCULAR NO. 14 (XL-35) DATED 11.04.1955 W HEREIN IT IS CONVEYED THAT THE INTENTION AND PURPOSE OF THE CIRC ULAR IS MERELY TO ITA NO. 7761/MUM/2014 SHRI VIPUL P. DALAL 5 EMPHASISE THAT EITHER SUO MOTO OR WHEN A MATTER IS BROUGHT TO THE NOTICE OF AUTHORITIES CONCERNED, ACTION SHOULD BE TAKEN TO SEE THAT ONLY LEGITIMATE TAXES ARE ASSESSED AND COLLECTED AND THAT ADVANTAGE SHOULD NOT BE TAKEN BY THE DEPARTMENT OF AN ASSESSEES IGNORANCE TO COL LECT MORE TAXES FROM THEM THAN ARE LEGITIMATELY DUE. (II) CIT VS. SANKALA POLYMERS (P) LTD. (2012) 20 TA XMANN.COM 378 (KARNATAKA), WHEREIN IT HAS BEEN HELD THAT WHEN A S PECIFIC PROVISION OF THE ACT HAS NOT BEEN APPLIED, WHILE PASSING AN ORDER OF ASSESSMENT, IT CONSTITUTES A MISTAKE APPARENT FROM RECORD, AND THE AUTHORITIES HAVE THE POWER TO RECTIFY THE SAID MISTAKE BY INVOKING THE P ROVISIONS OF SECTION 154 OF THE ACT. (III) ACIT VS. RUPAM IMPEX (2016) 66 TAXMANN.COM 18 1 (RAJKOT - TRIB.), WHEREIN ASSESSEE FILED AN APPLICATION SEEKING RECTI FICATION OF THE ORDER OF ASSESSMENT ON THE GROUND THAT IN COMPUTING INCOME I NCORRECT FIGURES HAD BEEN TAKEN, WHICH WAS REJECTED BY THE AO ON THE GRO UND THAT THERE WAS NO MISTAKE ON THE FACT OF THE RECORD SINCE THE ASSESSE E ITSELF HAD COMPUTED SUCH FIGURES. THE TRIBUNAL, RELYING ON CBDT CIRCULA R NO. 14 OF 1955, HELD THAT TAX CANNOT BE LEVIED ON THE ASSESSEE AT A HIGH ER AMOUNT OR RATE MERELY BECAUSE THE ASSESSEE UNDER A MISTAKEN BELIEF OR ERRONEOUSLY OFFERED INCOME FOR TAXATION AT A HIGHER RATE. (IV) ZEN TOBACCO (P) LTD. (2016) 65 TAXMANN.COM 320 (AHMEDABAD - TRIB) (V) CIRCULAR NO. 587 DATED 11.12.1990. 3.3 PER CONTRA, THE LEARNED D.R. SUPPORTED THE ORDE RS OF THE AUTHORITIES BELOW. 3.4.1 WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH T HE PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. TH E UNDISPUTED FACTS ON RECORD ARE THAT THE ASSESSEE FILED ITS RETURN OF IN COME FOR A.Y. 2008-09 DECLARING INCOME OF ` 1,22,09,311/- COMPRISING BUSINESS LOSS OF ` 5,04,26,202/-, STCG OF ` 44,12,003/-, LONG TERM CAPITAL GAINS OF ` 1,60,121/-, INCOME FROM OTHER SOURCES OF ` 11,76,849/-, HOUSE PROPERTY INCOME OF ` 3,80,338/- AND SALARY INCOME OF ` 61,90.000/-. THE RETURN OF ITA NO. 7761/MUM/2014 SHRI VIPUL P. DALAL 6 INCOME WAS PROCESSED UNDER SECTION 143(1) OF THE AC T BY ORDER DATED 10.12.2009 WHEREIN THE ASSESSEES INCOME WAS DETERM INED AT ` 1,23,19,310/- DUE TO CERTAIN ADDITIONS/DISALLOWANCE S TO THE RETURNED INCOME. THE BUSINESS LOSS OF ` 5,04,26,202/- WAS ACCEPTED BY THE AO AS RETURNED BY THE ASSESSEE BUT SET OFF WAS NOT GIVEN. 3.4.2 THE ASSESSEE, VIDE LETTER DATED 26.06.2012, P REFERRED AN APPLICATION FOR RECTIFICATION OF THE ORDER OF ASSESSMENT FOR A. Y. 2008-09 DATED 10.12.2009, SUBMITTING THAT HE HAD REALIZED THAT WH ILE FILING THE RETURN OF INCOME AND COMPUTATION OF INCOME HE HAD INADVERTENT LY OMITTED TO SET OFF THE BUSINESS LOSS OF ` 5,04,26,202/- AGAINST INCOME FROM OTHER HEADS (EXCEPT SALARY), I.E. STCG, LTCG, INCOME FROM OTHER SOURCES AND INCOME FROM HOUSE PROPERTY AND THAT INTEREST UNDER SECTION 234C OF THE ACT WAS WRONGLY CHARGED. THE AO VIDE ORDER DATED 22.08.2012 REJECTED THE ASSESSEES APPLICATION UNDER SECTION 154 OF THE ACT ON THE GROUND THAT IT IS THE ASSESSEE HIMSELF WHO HAD DECLARED INCOME OF ` 1,22,09,311/- IN THE RETURN OF INCOME FILED, WITHOUT CLAIMING SET OFF OF BUSINESS LOSS OF ` 5,04,26,202/- AND ALSO SINCE NO REVISED RETURN WAS FILED NOR SUCH CLAIM FOR SET OFF OF BUSINESS LOSS WAS MADE. ON APPEAL, T HE LEARNED CIT(A) UPHELD THE AOS VIEW. 3.4.3 SECTION 154 OF THE ACT CAN BE EXERCISED ONLY WHEN THERE IS A MISTAKE APPARENT FROM THE RECORDS OF ASSESSMENT; A MISTAKE THAT IS OBVIOUS AND PATENT, AND NOT SOMETHING THAT CAN BE ESTABLISHED B Y A LONG DRAWN OUT PROCESS OF REASONING ON POINTS ON WHICH THERE MAY B E CONCEIVABLY TWO OPINIONS. THE RECORDS, NOT ONLY MEANS THE ORDER OF ASSESSMENT BUT COMPRISES ALL PROCEEDINGS AND RECORD ON WHICH THE A SSESSMENT IS BASED, I.E. THE RECORDS OF ASSESSMENT, AND IT IS TO THIS W HICH THE ASSESSING AUTHORITIES MUST CONFINE ITSELF. WE FIND FROM THE D ETAILS BEFORE US THAT IN THE ORDERS OF THE AUTHORITIES BELOW, EMPHASIS HAS B EEN PLACED ON THE FACT THAT THE MISTAKE OF NOT SETTING OFF OR CLAIMING SET OFF OF THE BUSINESS LOSSES OF ` 5,04,26,202/- AGAINST THE OTHER HEADS OF INCOME (EX CEPT SALARY INCOME) WAS COMMITTED BY THE ASSESSEE. THIS ITSELF, WE FIND HAS RESULTED IN THE ERROR, SOUGHT TO BE RECTIFIED, CREEPING INTO THE OR DER OF ASSESSMENT AS WELL, ITA NO. 7761/MUM/2014 SHRI VIPUL P. DALAL 7 SINCE THE AO AFTER ACCEPTING AND DETERMINING THE BU SINESS LOSS, OUGHT TO HAVE SET OFF THE SAME AGAINST OTHER PERMISSIBLE/ELI GIBLE HEADS IN ACCORDANCE WITH LAW AS EMBEDDED IN THE STATUTE. RAT HER, IT IS SEEN THAT BOTH THE AUTHORITIES BELOW HAVE SOUGHT TO JUSTIFY T HE MISTAKE ON RECORD AS ONE ATTRIBUTABLE TO THE ASSESSEE. 3.4.4 PROCEEDINGS UNDER THE ACT ARE NOT ADVERSARIAL , I.E. WHO IS RESPONSIBLE FOR THE MISTAKE IS NOT MATERIAL. ON THE CONTRARY WH AT IS MATERIAL IS THAT, UNDOUBTEDLY, IN THE CASE ON HAND THERE HAS BEEN A M ISTAKE. THE FACT THAT THE MISTAKE IS ATTRIBUTED/ATTRIBUTABLE TO THE ASSES SEE DOES NOT ERASE THE FACT THAT A MISTAKE OR LEGAL REMEDIES FOR A MISTAKE HAS CREPT INTO THE ORDER OF ASSESSMENT. BASICALLY, THE PURPOSE OF ASSESSMENT OF INCOME IS THAT INCOME OF THE ASSESSEE, LIABLE TO TAX, HAS TO BE DE TERMINED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. IN THESE PROCEEDING S, IT IS NOT OPEN TO THE AUTHORITIES BELOW TO TAKE ADVANTAGE OF MISTAKES ADM ITTEDLY COMMITTED BY THE ASSESSEE UNDER A MISTAKEN BELIEF OF ERROR, BY L EVYING TAX OR A HIGHER AMOUNT/RATE. IN THE CASE ON HAND, THE ASSESSEE ADMI TTEDLY, INADVERTENTLY, DID NOT CLAIM SET OFF OF BUSINESS LOSSES AGAINST CE RTAIN HEADS OF INCOME IN THE RETURN OF INCOME. WHILE PROCESSING THE ASSESSEE S RETURN OF INCOME FOR A.Y. 2008-09 UNDER SECTION 143(1) OF THE ACT, THE A O AFTER ACCEPTING/ DETERMINING THE BUSINESS LOSS OF THE ASSESSEE AT ` 5,04,26,202/-, WAS DUTY BOUND IN ACCORDANCE WITH LAW AS LAID DOWN IN THE PR OVISIONS OF THE ACT TO HAVE ALLOWED SET OFF OF THE BUSINESS LOSS TO THE EX TENT PERMISSIBLE AGAINST OTHER HEADS OF INCOME AND CARRY FORWARD OF THE ELIG IBLE BALANCE IF ANY. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF DATTATRAYE GOPAL BHOTTE (1984) 150 ITR 460 HAS NOTED THE RELEVANT PORTION OF THE C BDT CIRCULAR 14 OF 1955 ISSUED TO ITS OFFICERS WHICH IS EXTRACTED HERE UNDER: - ..... OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADV ANTAGE OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. IT IS ONE OF THEIR DUTIES TO ASSIST TAXPAYER IN EVERY REASONABLE WAY, PARTICULARLY IN T HE MATTER OF CLAIMING AND SECURING ANY RELIEF AND IN THIS REGARD THE OFFICERS SHOULD TAKE THE INITIATIVE IN GUIDING THE TAX PAYER WHERE PROCEEDINGS OR OTHER PARTICULARS BEFORE THEM INDICATE THAT SOME REFUND O R RELIEF IS DUE TO HIM. THIS ATTITUDE WOULD IN THE LONG RUN BENEFIT TH E DEPARTMENT FOR IT WOULD INSPIRE CONFIDENCE IN HIM THAT HE MAY BE SURE OF GETTING A SQUARE DEAL FROM THE GOVERNMENT ..... ITA NO. 7761/MUM/2014 SHRI VIPUL P. DALAL 8 THE HON'BLE APEX COURT IN THE CASE OF UCO BANK VS. CIT (1999) 237 ITR 889 HAS HELD THAT CBDT CIRCULARS ARE BINDING ON REVENUE AND THAT THIS BINDING CHARACTER IS TO THE EFFECT THAT EVEN I F THEY BE FOUND NOT IN ACCORDANCE WITH HIS INTERPRETATION OF THE SECTION O R THEY DEPART OR DEVIATE FROM SUCH CONSTRUCTION. 3.4.5 IN VIEW OF THE FACTUAL AND LEGAL MATRIX OF TH E CASE ON HAND, AS DISCUSSED FROM PARA 3.1 TO 3.4.4 (SUPRA), WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE IS ENTITLED TO BE ALLOWED SET OFF OF B USINESS LOSS OF ` 5,04,26,202/-, AS DETERMINED BY THE AO IN THE ORDER OF ASSESSMENT FOR A.Y. 2008-09 DATED 10.12.2009, AGAINST HIS OTHER ELIGIBL E HEADS OF INCOME IN ACCORDANCE WITH LAW. IN OUR VIEW, FAILURE ON THE PA RT OF THE AO TO APPLY THESE PROVISIONS OF THE ACT IN RESPECT OF SET OFF O F DETERMINED BUSINESS LOSSES, WHILE PASSING THE ORDER OF ASSESSMENT, CONS TITUTES A MISTAKE APPARENT FROM THE RECORD. WE, ACCORDINGLY, DIRECT T HE AO TO RECTIFY THE ORDER OF ASSESSMENT FOR A.Y. 2008-09 DATED 10.12.2009 BY ALLOWING THE ASSESSEE SET OFF OF THE BUSINESS LOSSES OF ` 5,04,26,202/- AGAINST OTHER ELIGIBLE HEADS OF INCOME IN ACCORDANCE WITH THE LAW. IT IS ACCORDI NGLY ORDERED. 4. IN THE RESULT, THE ASSESSEES APPEAL FOR A.Y. 2008- 09 IS ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD SEPTEMBER, 2016. SD/ - SD/ - (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 23 RD SEPTEMBER, 2016 COPY TO: THE APPELLANT 1. THE RESPONDENT 2. THE CIT(A) -23, MUMBAI 3. THE CIT - 12, MUMBAI 4. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.