2023 (5) TMI 1259 - AT - Income Tax

Revised claim made in the return filed u/s 153A - Carry forward of Short Term Capital Loss - long-term capital loss made in the return u/s 153A which has been further revised and claimed as short-term capital loss - HELD THAT - Since, in the case of the assessee, the original return u/s 139(1) for the year under consideration was filed on 17.10.2016, however, due to search action at the premises of the assessee on 30.11.2017, the assessment for the year under consideration got abated and consequently notice u/s 153A was issued. In the return of income filed u/s 153A, the assessee claimed long term capital loss on the sale of the shares, subsequently, the said return was revised and the assessee claimed that since shares held only for the period of 35 months and therefore, loss arising from the same of those shares was in the nature of the short-term capital loss. In view of the decision of the Hon ble Supreme Court in the case of JSW Still Ltd. 2020 (2) TMI 307 - BOMBAY HIGH COURT the return claiming the loss has been filed in terms of section 139(1) of the Act and therefore, the assessee is eligible for carry forward of the loss as per the provisions of law. In the facts of the case, the Assessing Officer need to verify and compute the quantum of loss, therefore , in the interest of substantial justice, we feel it appropriate to restore this issue back to the file of the AO for examining the computation of claim of loss sought to be carried forward by the assessee - Ground of appeal of the assessee allowed for statistical purpose.

Summary

Issues involved:
The issue in this case involves the allowance of carry forward of Short Term Capital Loss amounting to Rs. 57,22,815 claimed by the assessee.

Summary:

Issue 1: Allowance of Carry Forward of Short Term Capital Loss
The Tribunal considered the issue of whether the claim of long-term capital loss made in the return under section 153A of the Income Tax Act, which was later revised and claimed as short-term capital loss, should be allowed to carry forward to subsequent years. The Tribunal referred to a decision by the Hon'ble Jurisdictional High Court in the case of JSW Steel Ltd., which held that in cases of abated assessment, the return of income filed under section 153A should be considered a 'regular return' of income. The assessee in this case had originally filed a return under section 139(1) of the Act, but due to a search action, the assessment was abated, and a notice under section 153A was issued. The assessee then claimed a short-term capital loss on the sale of shares of "Intime Properties Pvt. Ltd." after revising the return. The Tribunal, in line with the Supreme Court decision in the JSW Steel Ltd. case, held that the return claiming the loss was filed in accordance with the law, making the assessee eligible for carry forward of the loss. The Tribunal directed the Assessing Officer to verify and compute the quantum of loss, and therefore, restored the issue back to the AO for examination. The ground of appeal by the assessee was allowed for statistical purposes.

Decision:
The Tribunal allowed the appeal of the assessee, and the order was pronounced in the open court on 11/05/2023.