2011 (8) TMI 1172 - AT - Income Tax

Summary

Issues involved: Dispute over carry forward of loss u/s 139(5) for Assessment Year 2005-06.

Summary:
The appellant, an assessee, filed a return of income on 28.10.2005 u/s 139(1) declaring total income of Rs. 30,00,223/-. Later, a revised return was filed on 28.3.2006 claiming a long term capital loss of Rs. 10,80,121/- to be carried forward. The AO disallowed the claim stating that the original return did not declare any loss, hence revision u/s 139(5) was not permissible. The CIT(A) upheld this decision citing section 80. The Tribunal, however, allowed the claim to carry forward the loss, emphasizing that the revised return rectified the mistake within the time limit u/s 139(5) and the loss was determined as per the revised return, which should be treated as declared u/s 139(3). The Tribunal's decision was supported by a previous case with similar circumstances.

Key Points:
- Original return filed u/s 139(1) showed no loss, revised return u/s 139(5) claimed Rs. 10,80,121/- loss on sale of shares.
- AO accepted the loss but did not carry it forward, CIT(A) confirmed AO's decision.
- Tribunal held that revised return rectified the mistake within the time limit, so loss should be carried forward as declared u/s 139(3).
- Tribunal's decision supported by a previous case involving a similar claim of loss on sale of shares.

Decision:
The Tribunal allowed the appeal of the assessee, setting aside the CIT(A)'s order and permitting the carry forward of the loss.