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2019 (3) TMI 1115 - AT - Income TaxRevision u/s 263 by CIT-A - assessee had set off the speculative loss against the business income - in response to the notice, the assessee filed explanation stating that the assessee did not claim any set off of speculation loss against the business income and the AO also did not allow the set off of speculation loss against the business income - HELD THAT - Though the loss assessed including the speculation loss was ₹ 9,43,161/-, the AO allowed the business loss of ₹ 9,39,162/- for carry forward excluding the speculation loss of ₹ 4000/- (9,43,161-4000 9,39,162). Similarly the AO allowed the carry forward of speculation business loss separately for an amount of ₹ 37,13,336/- which is including current year speculation loss of ₹ 4000/-. Therefore, it is observed that the AO did not allow the speculation loss against business income or income from other sources and has not committed any error in the assessment order and determined the business loss and speculation loss correctly, hence, the assessment order passed by the AO was neither erroneous nor prejudicial to the interest of the revenue. Therefore, we set aside the order of the Ld.Pr.CIT passed u/s 263 - Decided in favour of assessee.
Issues:
1. Revision u/s 263 - Set off of speculation loss against business income. 2. Allowance of carry forward of business loss and speculation loss separately. Issue 1: Revision u/s 263 - Set off of speculation loss against business income: The appeal was filed against the order of the Principal Commissioner of Income Tax (Pr.CIT) for the Assessment Year (A.Y.) 2013-14, where the Pr.CIT found that the assessee had set off the speculative loss against the business income. The assessee contended that no such set off was claimed or allowed. However, the Pr.CIT determined that the speculation loss was indeed claimed and allowed to be set off against income from other sources. Consequently, the Pr.CIT held the assessment order passed by the Assessing Officer (AO) as erroneous and prejudicial to the revenue's interest. The Pr.CIT set aside the AO's order and directed the AO to recompute the income after providing a reasonable opportunity to the assessee. Issue 2: Allowance of carry forward of business loss and speculation loss separately: During the appeal hearing, it was revealed that the assessee admitted a total income of &8377; 9,77,411/- for A.Y. 2013-14, with revenue from operations at &8377; 3,68,67,794/-, income from other sources at &8377; 32,99,542/-, and a speculation loss of &8377; 4000/-. The assessee claimed carry forward of business loss separately from speculation loss in various schedules and documents. The AO allowed the carry forward of business loss and speculation loss separately. The AO's computation showed that the business loss was allowed for carry forward excluding the speculation loss. The Tribunal observed that the AO did not allow the speculation loss against business income or income from other sources, determining the business loss and speculation loss correctly. Consequently, the Tribunal set aside the Pr.CIT's order passed u/s 263 and restored the assessment order framed by the AO u/s 143(3) of the Act, allowing the appeal of the assessee. In conclusion, the Tribunal allowed the appeal of the assessee, emphasizing that the AO did not commit any error in determining the business loss and speculation loss separately, thereby setting aside the revision order u/s 263 and upholding the original assessment order.
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