2020 (11) TMI 605 - AT - Income Tax

Rectification of mistake - Carry forward loss not shown - HELD THAT - We find that the AO nor the CIT(A) did not look into the financial statements rectifying the mistake showing the opening stock on 01-04-2011. We note that the assessee raised the same before the CIT(A) but however he found that the assessee filed no such materials to demonstrate as to which caused such gross inadvertent mistake of not disclosing a huge amount of ₹ 70,00,000/-. As discussed above, the ld. AR prayed before this Tribunal to remand the matter to the file of AO for its proper verification of its account in determining the actual loss. DR agreed, reported no objection in remanding the matter to the file of AO. Taking into consideration the peculiar facts and circumstances of the case and in view of the discussion made here-in-above, we deem it proper to remand the matter to the file of AO for its fresh consideration to determine the actual loss for the year under consideration and subsequent assessment years. The assessee is liberty to file evidences, if any, in support of its claim. Thus, the order of CIT(A) is not justified and it is set aside. Accordingly, only ground raised by the assessee for A.Y. 2012-13 is allowed for statistical purpose.

Summary

Issues Involved:
1. Carry forward loss restriction for assessment year 2012-13.
2. Set off of brought forward loss for assessment year 2014-15.

Issue 1: Carry forward loss restriction for assessment year 2012-13:
The Appellate Tribunal ITAT Pune dealt with the appeal regarding the correctness of restricting the carry forward loss at ?22,69,353 instead of ?92,79,353 for the assessment year 2012-13. The assessee, a partnership firm engaged in real estate business, claimed the higher loss amount due to a mistake in accounting. The Assessing Officer (AO) restricted the loss amount after discrepancies were found in the accounts. The First Appellate Authority upheld the AO's decision, citing lack of evidence to support the inadvertent mistake claim by the assessee. The Tribunal noted the discrepancies in the opening stock values and the lack of rectification steps taken by the assessee. The Tribunal remanded the matter back to the AO for proper verification of accounts to determine the actual loss, allowing the assessee to submit supporting evidence. Consequently, the Tribunal set aside the CIT(A)'s order and allowed the appeal for the assessment year 2012-13.

Issue 2: Set off of brought forward loss for assessment year 2014-15:
In the assessment year 2014-15, the assessee claimed set off of brought forward loss for the next year, which the AO denied, determining the total income at ?3,79,729. The CIT(A) upheld the AO's decision. Considering a similar issue from the assessment year 2012-13 where the matter was remanded for verification of accounts, the Tribunal decided to remand the appeal for the year 2014-15 to the AO for consideration along with the earlier assessment year. The Tribunal allowed the set off of loss if found appropriate, thereby allowing the appeal for the assessment year 2014-15 for statistical purposes.

In conclusion, the Appellate Tribunal ITAT Pune addressed the issues of carry forward loss restriction for the assessment year 2012-13 and set off of brought forward loss for the assessment year 2014-15, remanding the matters back to the Assessing Officer for proper verification and consideration, respectively. The Tribunal's decisions aimed at ensuring accurate determination of losses and upholding the principles of taxation law.