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2021 (8) TMI 1024 - AT - Income TaxRevision u/s 263 - long-term capital loss - HELD THAT - Documentary evidence placed on record clearly establish that even though the claim of the assessee for long-term capital loss was allowed by the AO only to the extent of ₹ 1,19,29,790/-, even the said loss to the extent allowed in the assessment was not allowed to be carried forward by the AO to the subsequent years as per the computation sheet annexed to the assessment order. Even the ld. CIT(DR) has not been able to rebut or controvert this position which is clearly evident from the assessment order passed by the Assessing Officer under section 143(3) read with computation sheet annexed thereto and further corroborated by the application filed by the assessee under section 154 before the Assessing Officer and the appeal filed before the ld. CIT(Appeals). We, therefore, find merit in the contention of the ld. Counsel for the assessee that there was no error in the order of the Assessing Officer dated 28.12.2018 passed under section 143(3) in allowing to carry forward the entire long-term capital loss claimed by the assessee instead of ₹ 1,19,29,790/- only allowed in the assessment order, as alleged by the ld. Principal CIT in his impugned order. The order passed by the Assessing Officer under section 143(3) thus was not erroneous as well as prejudicial to the interest of the revenue and the ld. Principal CIT, in our opinion, was not justified in revising the same vide his impugned order passed under section 263. We, therefore, set aside the order passed by the ld. Principal CIT under section 263. Appeal of the assessee is allowed.
Issues:
1. Revision under section 263 - Error in allowing carry forward of long-term capital loss. Analysis: The judgment by the Appellate Tribunal ITAT Kolkata involved a case where the assessee, a Company, filed an appeal against the order of the Principal Commissioner of Income Tax (Appeals) under section 263 of the Income Tax Act, 1961. The issue revolved around the carry forward of long-term capital loss disallowed by the Assessing Officer. The Principal CIT found an error in the assessment order, where the entire long-term capital loss claimed by the assessee was allowed to be carried forward for future years, contrary to the actual disallowed amount. The Principal CIT issued a notice under section 263, requiring the assessee to show cause as to why the order should not be revised. The assessee contended that the matter was already under appeal and could not be reconsidered under section 263. The Principal CIT, however, held that the assessment order was erroneous and prejudicial to the revenue's interest, setting it aside for revision. Upon appeal to the Tribunal, the assessee argued that the Assessing Officer did not allow the carry forward of the entire long-term capital loss as claimed, as alleged by the Principal CIT. The Tribunal examined the assessment order and related documents, finding that the Assessing Officer had indeed disallowed a portion of the long-term capital loss and did not allow the remaining amount to be carried forward. The Tribunal noted that the application for rectification filed by the assessee remained pending, indicating the mistake in the assessment. The Tribunal concluded that there was no error in the original assessment order, as claimed by the Principal CIT, and set aside the revision under section 263. In the final judgment, the Tribunal allowed the appeal of the assessee, emphasizing that the original assessment order was not erroneous or prejudicial to the revenue's interest. The Tribunal's decision highlighted the discrepancies in the carry forward of the long-term capital loss and the pending rectification application, leading to the setting aside of the revision under section 263.
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