SHRI JAI SINGH SETHIA, Jaipur V. DCIT, Jaipur

ITA 883/JPR/2012

• Counselvise Citation: 88323114 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 26-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: MANISH BORAD; M L BOARD
• Keywords: Salary income; Wrong claim; Capital expenditure
• Section: 143(3); 139(5)

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JAIPUR BENCH : JAIPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 883/JP/2012 (A.Y. 2009-10) JAI SINGH SETHIA, VS. THE DCIT, CIRCLE-2, 284, FRONTIER COLONY, ADARSH NAGAR, JAIPUR. PAN NO. ACHPS 5306 A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANISH BORAD & SHRI M.L. BOARD. DEPARTMENT BY : SHRI D.C. SHARMA - D.R. DATE OF HEARING : 30/01/2014. DATE OF PRONOUNCEMENT : 28/02/2014. O R D E R PER HARI OM MARATHA, J.M THIS APPEAL OF THE ASSESSEE FOR A.Y. 2009-10 IS DI RECTED AGAINST THE ORDER OF LD. CIT(A)-I, JAIPUR, DATED 29/10/2012. 2 BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE, AS INDIVIDUAL, DERIVES INCOME FROM SALARY, HOUSE PROPE RTY, CAPITAL GAINS AND 2 OTHER SOURCES. FOR A.Y. 2009-10, HE FILED HIS RETU RN OF INCOME ON 29/09/2009 DECLARING TOTAL INCOME OF RS. 28,27,610/ -. AS AGAINST WHICH, THE ASSESSMENT WAS MADE ON 14/12/2001 UNDER SECTION 143(3) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) ON THE TOTAL INCOME OF RS. 59,00,000/-, WHICH READS AS UNDER:- INCOME UNDER THE HEAD SALARY RS. 22,80,000 INCOME UNDER THE HEAD CAPITAL GAINS RS. 3,72,932 INCOME UNDER THE HEAD HOUSE PROPERTY RS. 11,53,534 INCOME FROM OTHER SOURCES AS DISCUSSED IN PARA-3 RS. 23,42,352 GROSS TOTAL INCOME RS. 61,48,818 LESS: DEDUCTION UNDER CHAPER VI - A RS. 2,48,821 TOTAL INCOME RS. 58,99,997 R/O RS. 59,00,000 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL AND LD . CIT(A) HAS GIVEN PART RELIEF. HE HAS SUSTAINED ADDITION OF RS . 23,42,352/- AND HAS ALSO CONFIRMED THE DISALLOWANCE OF LOSS CLAIMED AT RS. 7,30,039/- AND HAS ADDED THE SAME UNDER THE HEAD INCOME FROM OTHER SO URCES. THE ASSESSEE BEING FURTHER AGGRIEVED HAS FILED THIS APP EAL BY RAISING THE FOLLOWING GROUNDS:- 3 1. THAT THE LD. CIT(A) ERRED IN SUSTAINING THE DIS ALLOWANCE OF LOSS OF RS. 7,30,039/- UNDER THE HEAD INCOME FROM OTHER SOURCE S AND CONSEQUENTLY ASSESSING THE INCOME FROM OTHER SOURCE S AT RS. 23,42,352/-, WHICH SUSTENANCE OF DISALLOWANCE OF LO SS OF RS. 7,30,039/- AND ASSESSING THE INCOME FROM OTHER SOUR CES AT RS. 23,42,352/- ARE MOST ARBITRARY, UNJUST, UNTENABLE A ND BAD IN FACT AND IN LAW AND IN THE ALTERNATIVE VERY EXCESSIVE W.R.T. FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT LD. CIT(A) ERRED IN SUSTAINING THE DISALLOW ANCE OF INTEREST PAID BY ASSESSEE AT RS. 30,72,391/- TO VARIOUS PERSONS I NCLUDING THE INTEREST PAID ON O.D. ACCOUNT MAINTAINED WITH SBBJ, WHICH SUSTENANCE OF DISALLOWANCE OF INTEREST EXPENSES OF RS. 30,72,391/-, CONSEQUENTIAL DISALLOWANCE OF LOSS OF RS. 7,30,039/ - RETURNED BY ASSESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES AND ASSESSING THE INCOME FROM OTHER SOURCES AT RS. 23,42,352/- AR E MOST ARBITRARY, UNJUST AND UNTENABLE IN FACT AND IN LAW AND IN THE ALTERNATIVE EXCESSIVE W.R.T. FACTS AND CIRCUMSTANCES OF THE CAS E. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE CAREFULL Y GONE THROUGH THE ENTIRE RECORD. BOTH THE PARTIES HAVE REITERATE D THEIR EARLIER ARGUMENTS. AFTER CONSIDERING THE RIVAL SUBMISSIONS VIS--VIS RECORD, WE HAVE FOUND THAT DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD EARNE D INTEREST INCOME TOTALING TO RS. 20,74,937/- WHICH INCLUDED INTEREST FROM BANK OF RS. 1,391/- AND INTEREST ON FDRS OF RS. 20,73,546/- . AGAINST THIS INCOME, THE ASSESSEE HAS CLAIMED INTEREST PAID OF RS. 28,04 ,976/-. RESULTANTLY, A LOSS OF RS. 7,30,039/- HAS BEEN SHOWN UNDER THE HEA D INCOME FROM OTHER SOURCES. THE ASSESSEE HAS SET OFF TOTAL INTEREST PAID OF RS. 30,72,391/- 4 AGAINST INTEREST RECEIVED FROM VARIOUS PARTIES OF RS. 2,67,415/- AND THEN IT HAS BEEN CLAIMED AGAINST THE INTEREST RECEIVED O N FDRS. THE BREAKUP OF INTEREST PAID AND RECEIVED IS AS UNDER:- DETAILS OF INTEREST PAID:- INTEREST PAID ON O/D AGAINST FDR RS. 18,75,093 /- INTEREST PAID ON LIC RS. 2,23,412/- INTEREST PAID ON CAR LOAN RS. 52,692-21/- INTEREST PAID TO INDIA BULLS ON BUSINESS LOAN OF R S. 30 LACS RS. 92,217/- INTEREST PAID TO BARCLAYS ON BUSINESS LOAN OF RS. 20 LACS RS. 1,08,939-54/- INTEREST PAID TO SCB ON BUSINESS LOAN OF RS. 13 LA CS RS. 34,829/- INTEREST PAID ON SCB ON BUSINESS LOAN OF RS. 25 LA CS RS. 38,985/- INTEREST PAID TO MONEY LINE ON BUSINESS LOAN OF RS . 79.70 LACS RS. 6,46,222-91/- TOTAL RS. 30,72,391/- INTEREST RECEIVED ON LOAN:- NAME OF THE PARTY INTEREST RECEIVED RATE OF INTE REST SIMI CHACHERA RS. 1,01,250/- 9% HUKUM CHAND RS. 28,750/- 9% ANIL CHACHERA RS. 1,37,250/- 9% ON DEBENTURES RS. 165/- 6% TOTAL RS. 2,67,415/- NET BALANCE RS. 28,04,976-01 5. THE ASSESSING OFFICER WANTED THE ASSESSEE TO ESTAB LISH NEXUS BETWEEN INTEREST PAID (EXPENSES) AND INTEREST (INCO ME) EARNED BY 5 PROVIDING DATE-WISE CO-RELATION IN ORDER TO PROVE T HAT THE SAID EXPENSES WERE INCURRED WHOLLY AND EXCLUSIVELY FOR EARNING IN TEREST INCOME. THE ASSESSEE REPLIED VIDE LETTER DATED 13/09/2011 AS UN DER:- ASSESSEE HAD MADE FDR AT THE TIME OF SURPLUS FUND BUT AT THE TIME OF FUND REQUIREMENT HE TAKEN LOAN AGAINST THESE FDR TO REDU CE THE COST, IF TAKEN PREMATURE PAYMENT THAN IT WOULD BE COSTLY, SO TO AV OID EXTRA COST ASSESSEE HAD TAKEN O/D LIMIT AGAINST FDR AS WELL AS OTHER LO ANS FROM OTHER FINANCIAL INSTITUTIONS. ALTHOUGH INTEREST INCOME AND EXPENDI TURE ARE COVERED UNDER THE HEAD OF INCOME FROM OTHER SOURCES, SO WE CANT SEPARATE THE INCOME AND EXPENDITURE OF THE SAME NATURE. THEREFORE, THE CLAIM OF THE ASSESSEE IS JUSTIFIED AS PER LAW. THE ABOVE REPLY DID NOT SATISFY THE ASSESSING OFFIC ER AND HE REQUIRED THE ASSESSEE TO FILE FURTHER REPLY. THEREAFTER, THE AS SESSEE FILED ANOTHER REPLY DATED 07/10/2011, WHICH READS AS UNDER:- ASSESSEE HAS MADE FDR BY LOAN TAKEN FROM M/S. SET HIA SALES CORPORATION PROPRIETOR SHRI JAI SINGH SETHIA RS. 2,21,00,000/- ON DATED 17 JAN 2007 AND AFTER THAT ASSESSEE TOOK OVERDRAFT LIMIT OF RS. 1,9 8,90,000 AGAINST ABOVE FDR. THIS AMOUNT WAS UTILIZED BY THE ASSESSEE ON D ATED 25/01/2007 TO REPAY THE ABOVE LOAN, WHICH WAS TAKEN TO MAKE THE F DR. THUS, INTEREST EXPENDITURE MADE BY ASSESSEE WAS EXPENDED WHOLLY AN D EXCLUSIVELY FOR THE PURPOSE OF MAKING OR EARNING SUCH INCOME. THIS IS DEDUCTIBLE U/S 57 OF THE I.T. ACT. 6 . HOWEVER, AFTER CONSIDERING THE ABOVE REPLY EVEN H E WAS NOT CONVINCED AND WITH REFERENCE TO THE PROVISIONS OF S ECTION 57 OF THE ACT, HE HAS REJECTED THE CLAIM OF THE ASSESSEE. ACCORDI NG TO HIM THE CLAIM OF INTEREST OF RS. 28,04,976/- CAN BE ALLOWED ONLY IF IT IS TO EARN INTEREST 6 INCOME OF RS.20,74,937/- ON FDRS AND OTHER INTEREST OF RS.2,67,415/- PLUS INTEREST FROM BANK OF RS. 1,391/-. HE HAS OBSERVED THAT THE ASSESSEE HAS TAKEN A LOAN FROM M/S. SETHIA SALES CORPORATION, WH ICH WAS ASSESSEES OWN PROPRIETORSHIP CONCERN AND HAS INVESTED THE SAM E IN FDRS OF RS. 2.21 CRORES AGAINST WHICH HE HAS OPENED AN OD ACCOUNT IN SBBJ BANK AND AFTER WITHDRAWING MONEY FROM THIS OD AMOUNT HAS REPAID TH E LOAN AND HAS PAID INTEREST TO THE BANK ON OD ACCOUNT. ON THIS OBSERV ATION, THE ASSESSING OFFICER HAS INFERRED THAT THE ASSESSEE HAS NOT WHOL LY AND EXCLUSIVELY INCURRED THE EXPENSES FOR EARNING OF INTEREST INCOM E AS POSTULATED BY SECTION 57 OF THE ACT. THE ASSESSING OFFICER FURTH ER OBSERVED THAT THE LOAN RAISED TO THE TUNE OF RS. 1,98,90,000/- FROM O D ACCOUNT WAS ACTUALLY USED FOR REPAYMENT OF LOAN OF RS. 2.21 CRORES TAKEN FROM M/S. SETHIA SALES CORPORATION. THUS, ACCORDING TO ASSESSING OF FICER, THE ASSESSEE HAD TAKEN MONEY FROM ONE POCKET AND PUT IT IN HIS ANOTH ER POCKET. THEREFORE, THE TRANSACTIONS OF TAKING LOAN AND REPA YMENT OF THE SAME, CANNOT BE COVERED UNDER SECTION 57 OF THE ACT. THE FOLLOWING CHART DEPICTS FACTUAL MATRIX OF THIS ISSUE.- NAME OF THE LOAN PARTY RATE OF INTEREST UTILIZATIO N OF LOAN AMOUNT (IN RS.) 1.MONEYLINE (RS.79.70 LACS) 16% A. PROCESSING FEE, PRE - EMI INT.& INS PAID 1,57,451/- B. NASH FASHION INDIA LTD. 28,00,000/- 7 C. CONST. AT 683, VIVEK VIHAR 10,00,000/- D. DONATION TO BHARTIYA SHIKSHA SAMITI 1,00,000/- E. DONATION TO SETHIAS EDUCATION 2,50,000/- F. LIC PREMIUM PAID 4,54,512/- G. INTEREST ON LOAN TO LIC 2,21,551/- H. PAID TO SMT. M.L. SETHIA 5,00,000/- I. CASH WITHDRAWAL 5,30,000/ - J. DONATION FOR SMS 14,53, 100/ - K. DONATION TO MAHAPRAGYA ADHYATAN 5,00,000/- L. ADVERTISEMENT 4551/ - 2. BARCLAYS (RS. 20 LACS) 17% PAID TO NASH FASHION INDIA LTD. RS. 20 LACS 3. CHOLAMANDALAM DSR FINANCE (RS. 20 LACS) 17% -DO- -DO- 4. STANDARD CHARTERED BANK (RS. 13 LACS + RS. 25 LACS) 17.50% AND 17% RESPECTIVELY -DO- RS. 13 LACS + RS. 25 LACS 5. INDIABULLS (RS. 30 LACS) 18% - DO - RS. 30 LACS FROM THE ABOVE FACTUAL POSITION IT HAS INFERRED TH AT TOTAL INTEREST OF RS. 30,72,392/- PAID BY HIM TO THE AFOREMENTIONED P ARTIES HAS NOT BEEN INCURRED IN EARNING INCOME IN QUESTION AND THAT NO NEXUS WHATSOEVER EXISTS BETWEEN INTEREST EXPENSES OF RS. 30,72,391/- AND THE INTEREST RECEIVED OF RS. 23,42,352/- (RS. 20,73,546/- ON FDR S + RS. 1,391/- FROM BANK = RS. 2,67,415/- FROM OTHER PARTIES). THE REQ UISITE CONDITION FOR ALLOWANCE UNDER SECTION 57(III) OF ANY OTHER EXPEND ITURE (NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE) IS THAT IT SHOULD BE EXPENDED WHOLLY AND 8 EXCLUSIVELY FOR THE PURPOSE OF MAKING OR EARNING OF INCOME. THE LOSS OF RS. 7,30,039/- DECLARED BY THE ASSESSEE HAS BEEN AS SESSED BY CONVERTING THE LOSS INTO AN INCOME OF RS. 23,42,352/-. THE AS SESSEE HAS CLAIMED A SHORT TERM CAPITAL GAIN (STCG) OF RS. 3,72,932/- ON THE SALE OF A PLOT SITUATED AT NO. 669, VIVEK VIHAR, NEW SANGANER ROAD , JAIPUR IN THE COMPUTATION OF INCOME. THIS STCG WAS NOT ALLOWED B ECAUSE IT HAD NOT BEEN CLAIMED IN THE ROI . AS PER THE ASSESSING OFF ICER, THE REMEDY LIES UNDER SECTION 139(5) OF THE ACT BY REVISING RETURN OF INCOME ONLY. BUT THE TIME FOR REVISING RETURN HAD ALREADY LAPSED. AS PE R THE ASSESSEE, IN FACT, IT IS LTCG AND NOT STCG AND THE ASSESSING OFFICER H AS WRONGLY TREATED IT AS STCG . IT IS FOUND THAT THE RETURN COULD BE REV ISED UNDER SECTION 139(5) UPTO 31/03/2011, BUT IT WAS NOT REVISED WITH IN THAT TIME. BEFORE US, THE LD. A/R HAS TRIED TO MAKE OUT A CASE THAT T HE MAJOR PORTION OF INTEREST PAID IS OF RS. 18,75,093/- WHICH WAS PAID ON THE OD ACCOUNT WHICH HAS BEEN OPENED ON THE SECURITY OF THESE FDRS AND THAT AGAINST THIS INTEREST-PAID INTEREST ON FDRS HAS BEEN EARNED AT R S. 20,73,546/-, THUS, FOR ACCOUNTING THE INTEREST PAID AND INTEREST RECEI VED ARE TO BE TREATED AS RELATED ONE BEING DEPOSIT WITH SBBJ BANK AND OTH ER BORROWING MONEY AGAINST OD LIMIT BUT BASED ON THE SAME FDRS OF RS. 2.21 CRORES. THUS, ACCORDING TO LD. A/R THESE ARE NOT TWO DIFFERENT TR ANSACTION BUT FROM 9 ONLY ONE SINGLE TRANSACTION. THUS, INCOME RECEIVED BY THE ASSESSEE ON THESE TRANSACTION IS ONLY RS. 1,98,453/- BECAUSE IN TEREST RECEIVED ON FDRS IS RS. 20,73,546/- AND INTEREST PAID ON OD ACCOUNT OF RS. 18,75,093/-. IN OTHER WORDS AS PER LD. A/R THE INTEREST RECEIVED HA S TO BE REDUCED BY THE AMOUNT OF INTEREST PAID, AS THERE EXISTS DIRECT NEX US BETWEEN THE DEPOSIT AND THE BORROWING OF MONIES. RELIANCE HAS BEEN PLA CED ON THE FOLLOWING TWO DECISIONS:- 1. CIT VS. ANDHRA FARM CHEMICAL CORPN. REPORTED IN 171 ITR 660 (AP HIGH COURT ) 2. CIT VS. DR. V.P. GOPINATHAN REPORTED IN 229 ITR PAG E 801 (KERALA HIGH COURT) 8. TO ELABORATE AND ESTABLISHES THE NEXUS BETWEEN TWO TRANSACTIONS, WITH REFERENCE TO LEDGER ACCOUNTS INDEXED IN THE PA PER BOOK, IT HAS BEEN CANVASSED THAT THE ASSESSEE WAS ENGAGED IN THE BUSI NESS OF EXPORT AND FOR THAT PURPOSE, HE HAD RAISED THE LOANS FROM VARIOUS FINANCIAL INSTITUTIONS. THE LOANS WERE TAKEN FOR A PERIOD OF 3-5 YEARS OR E VEN FOR MORE THAN THIS PERIOD ON THE LOAN WAS TO BE PAID IN MONTHLY INSTAL LMENTS. THE MONTHLY INSTALLMENTS INCLUDED PRINCIPAL AND INTEREST. THE LD. A/R HAS EXPLAINED THAT IN THE INITIALLY ANY INSTALLMENTS COMPRISED OF MAJOR PORTION OF INTEREST AS COMPARED TO PORTION OF PRINCIPAL AND EV ENTUALLY THIS PATTERN 10 GOES ON REVERSING WHEN THE LAST INSTALLMENTS ARE FO UND COMPRISED OF PRINCIPAL ALONE. IT WAS EXPLAINED THAT IN CASE O F EARLY REPAYMENT FINANCIAL INSTITUTIONS CHARGE A PENAL INTEREST AND SUCH A CONDITION IS ALREADY STIPULATED IN THE AGREEMENT. THE ASSESSEE BEING PRUDENT BUSINESS MAN DID NOT WANT TO LOSE HIS HARD EARNED I NCOME BY JUST PAYING PENAL INTEREST ETC AND WITH A VIEW TO OVERCOME SUCH A SITUATION HE PURCHASED FDRS OF RS. 2.21 CRORES OUT OF HIS OWN AC CUMULATED CAPITAL/BUSINESS FUNDS ON 18/01/2007 WHEN HIS BUSIN ESS WAS RUNNING. TO REGULARLY REPAY INSTALLMENTS BUSINESS LOANS TAKEN E ARLIER HE OPENED AN OVERDRAFT FACILITY AGAINST THESE FDRS BECAUSE LOAN IN NORMAL COURSE CARRIES A MUCH HIGHER RATE OF INTEREST IN COMPARISO N TO THE LOAN TAKEN AGAINST THE BANK FDRS. THUS, ACCORDING TO LD. A/R OD ACCOUNT HAS HELPED THE ASSESSEES BUSINESS INTEREST. IT WAS EMPHASIZE D THAT THE ASSESSEE HE HAS ROUTED DEPOSITS OF HIS INCOME FROM RENT, SALARY AND INTEREST THROUGH THIS OD ACCOUNT AND HAS PAID INSTALLMENTS OF LOANS THROUGH THIS OD ACCOUNT. IN THIS WAY, THE ASSESSEE HAS EARNED REGU LAR INTEREST INCOME ON FDRS AND HAS PAID LESS INTEREST, BY AVOIDING PENAL INTEREST. IT WAS ARGUED THAT HAD THE ASSESSEE NOT AVAILED THE OD FACILITY H E WOULD HAVE TO PAY HIGHER AMOUNT OF INTEREST. THUS, ACCORDING TO HIM THE ASSESSEE HAS ACTED WHOLLY IN THE INTEREST OF EARNING INCOME. 11 9. AFTER CONSIDERING THE OBSERVATIONS OF THE ASSESSIN G OFFICER AND THAT OF LD. CIT(A) VIS--VIS THE SUBMISSIONS OF LD. A/R, WE HAVE FOUND THAT THIS IS A PECULIAR CASE IN WHICH, OBVIOUSLY, THE ASSESSE E HAS TRIED TO WARD OFF LOSS IN HIS BUSINESS OF EXPORTS CARRIED-ON IN EARLI ER YEARS. HE HAD RAISED LOAN FOR BUSINESS PURPOSES AND TO REPAY THE SAME TH E ASSESSEE HAS EMPLOYED THE ABOVE STATED MODE BY DEVISING A NOVEL SYSTEM TO THE BEST OF HIS WISDOM TO WARD OFF HIGHER LOSS IN HIS BUSINE SS. WE CAN CLEARLY FIND OUT A NEXUS BETWEEN THE TWO TRANSACTIONS I.E. ONE O F MAKING DEPOSIT IN FDRS AND THE OTHER AVAILING THE FACILITY OF OD ACCO UNT. THIS METHODOLOGY HAS HELPED THE INTERESTS OF THE BUSINESS OF THE ASS ESSEE AND HAS NOT DEFEATED THE INTEREST OF THE REVENUE. THE ASSESSEE IS NOT CLAIMING ANYTHING WHICH IS NOT KNOWN TO LAW UNDER THE PROVIS IONS OF SECTION 57 OF THE ACT AS DISCUSSED ABOVE, THE ASSESSEE IS ENTITLE D TO CLAIM SUCH EXPENSES. THE PRINCIPAL OF NETTING OF INTEREST IS CLEARLY APPLICABLE IN THIS CASE. IN OUR CONSIDERED OPINION, THE ASSESSING OFF ICER HAS FARFETCHED THE ISSUE AND HAS TRIED TO SEPARATE THE TWO TRANSACTION S TO THE POSSIBLE LIMITS SO THAT BOTH THE TRANSACTIONS LOOK LIKE ENTIRELY DI FFERENT TRANSACTIONS. THE ABOVE SUBMISSIONS OF THE ASSESSEE WERE NOT REPL IED BY EITHER THE ASSESSING OFFICER OR BY THE LD. CIT(A) IN THEIR COR RECT PERSPECTIVE. IN OUR CONSIDERED OPINION, THE DECISIONS RELIED ON BY LD. A/R (SUPRA) CLEARLY HELP 12 AND SUPPORT THE CASE OF THE ASSESSEE. THE NEXUS BE TWEEN INTEREST PAID AND THE INTEREST RECEIVED DEFINITELY CO-EXISTS IN T HE MANNER IT HAS BEEN EXPLAINED BY LD. A/R. THEREFORE, IT IS NOT A CASE WHERE SOMETHING SHOULD BE DISALLOWED IN THE NAME OF CLOSE NEXUS WHICH ACCO RDING TO ASSESSING OFFICER DOES NOT EXIST IN THIS CASE. CONTRARY TO A SSESSING OFFICERS FINDING, THE EXPLANATION OF THE LD. A/R WHICH WAS E VEN TAKEN BEFORE THE ASSESSING OFFICER SEEMS TO BE QUITE JUSTIFIED AND E VERY PRUDENT MAN WOULD LIKE TO SAFEGUARD HIS INTEREST IN THAT MANNER . IN OUR OPINION, THE ASSESSEE HAS NOT MADE A WRONG CLAIM. INSOFAR AS CL AIM OF LONG TERM CAPITAL GAIN AND SHORT TERM CAPITAL GAIN IS CONCERN ED, IT IS NOT A QUESTION OF REVISING OF THE RETURN. THE ASSESSEE HAS MADE A CLAIM OF CAPITAL GAIN AND IF IT IS FOUND THAT FROM THE SALE OF CAPITAL AS SET. LONG TERM CAPITAL GAIN WOULD ARISE AND IF THIS FACT IS BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS HE CA NNOT ESCAPE FROM HIS DUTY OF DOING JUSTICE, AS PER LAW. IN CASE THE ASS ESSEE WOULD HAVE CLAIMED IT AS A LONG TERM CAPITAL GAIN, WOULD THE A SSESSING OFFICER NOT CONSIDER THE TIME LIMIT WHICH DISTINGUISHES THE TWO CLAIM AND IN CASE IF HE FOUND IT WAS NOT A LONG TERM CAPITAL GAIN, WE DO NO T TREAT THE SAME AS SHORT TERM CAPITAL GAIN EVEN THOUGH THE ASSESSEE HA S NOT REVISED HIS RETURN. THE ASSESSING OFFICER IS BOUND TO MAKE COR RECT ASSESSMENT OF 13 INCOME AS PER THE ACT AND HE CANNOT TAKE ADVANTAGE OF THE IGNORANCE OF AN ASSESSEE NOR HE CAN IGNORE ANY CLAIM MADE DURING THE ASSESSMENT PROCEEDINGS. ACCORDINGLY WE ALLOW BOTH THE GROUND S OF ASSESSEES APPEAL 10. IN THE RESULT THIS APPEAL STANDS ALLOWED. (ORDER PRONOUNCED IN THE COURT ON 28 TH FEBRUARY, 2014). SD/- SD/- (N.K.SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 TH FEBRUARY, 2014. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JAIPUR.