2014 (4) TMI 347 - AT - Income Tax

Rectification of mistake u/s 254 of the Act - Allowability of deduction of interest Held that - The tribunal has taken a conscious decision in the matter based on the remand report by the AO - though the assessments for the years were not originally made u/s 143(3), as was the case for the other three years also decided by the tribunal, the tribunal did not consider the same as material, and decided the issue at hand following its earlier order for A.Y. 2001-02 - the Revenue claiming it as not so, could only be decided in the review proceedings, which could only be before a higher appellate forum and fall outside the ambit of section 254(2) or the rectification proceedings before the tribunal Decided against Revenue. Entitlement for set off of STCL against income u/s 153A of the Act Held that - There was no reference to the ground or aspect in any of the appeals by the assessee before the first appellate authority thus, the subject matter of the Revenue s grievance does not arise either out of the order/s by the first appellate authority or by the tribunal Decided against Revenue.

Summary

Issues:
1. Allowance of deduction in respect of interest not claimed by the assessee.
2. Entitlement of the assessee to set off short term capital gain (loss) against other income.

Issue 1: Allowance of deduction in respect of interest not claimed by the assessee

The Revenue raised an objection regarding the tribunal allowing a deduction for interest not claimed by the assessee in their return of income. The Revenue argued that this action was in error based on previous court decisions. The tribunal, however, considered the matter based on the remand report by the Assessing Officer and upheld the impugned orders. The tribunal noted that the assessments for the relevant years were not originally made under section 143(3) but decided the issue based on its earlier order for a different assessment year. The tribunal concluded that the Revenue's objection could only be addressed in review proceedings before a higher appellate forum, falling outside the scope of rectification proceedings before the tribunal. Therefore, the tribunal found no merit in the Revenue's objection.

Issue 2: Entitlement of the assessee to set off short term capital gain (loss) against other income

The second objection raised by the Revenue pertained to the entitlement of the assessee to set off short term capital gain (loss) against other income under section 153A, which was not included in the assessee's return under section 139(1). The tribunal found no reference in the impugned order or any direction regarding this issue. The ground raised by the Revenue in this regard was of a general nature and did not specifically address this aspect. Upon reviewing the orders of the first appellate authority and the grounds assumed before the tribunal, it was found that the specific issue raised by the Revenue was not addressed in any appeals by the assessee or the first appellate authority. Consequently, the tribunal held that the Revenue's grievance did not arise from the orders of the authorities and was not maintainable in the present proceedings. As a result, the Revenue's miscellaneous applications were dismissed.

This detailed analysis of the judgment highlights the key issues raised by the Revenue, the tribunal's considerations, and the ultimate decision rendered in each aspect of the case.