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2021 (10) TMI 969 - AT - Income TaxRectification of mistake u/s 154 - Adjustment of current year losses with income under section 115BBD - claim of the assessee was dismissed by AO who was of the opinion that since the assessee has declared income u/s 115BBD of the Act and calculated the tax at special rate of 15%, therefore, the same cannot be set off against losses - CIT-A was of the opinion that whether current year loss can be set off from the income declared under section 115BD of the Act is a highly debatable issue and a debatable issue cannot be rectified u/s 154 -HELD THAT - It is true that in the intimation u/s 143(1) of the Act, loss of the current year has been mentioned at ₹ 22,53,768/ . It is equally true that the assessee has returned income in respect of dividend received from a foreign company u/s 115BBD. As per clause (2), no deduction in respect of any expenditure or allowance should be allowed to the assessee under any provision of this Act in computing its income by way of dividends referred to in subsection (1). Now, the interpretation of expenditure or allowance to cover current year loss is, in my considered opinion, a highly debatable issue and no precedences have been made available to me. Therefore, in these circumstances, I have no hesitation in upholding the findings of the ld. CIT(A). Ground raised by the assessee is dismissed.
Issues Involved:
Adjustment of current year losses with income under section 115BBD of the Income tax Act, 1961. Analysis: The appeal was filed against the order of the Commissioner of Income Tax [Appeals] regarding the adjustment of current year losses with income under section 115BBD of the Income tax Act, 1961. The appellant company declared an income of ?26,26,860 and the assessed income was ?31,51,660. The assessee sought rectification of error in the computation of assessed income due to a mistake where the current year loss was not adjusted while computing the assessed income. The Assessing Officer rejected the claim, stating that since the assessee declared income under section 115BBD of the Act, it cannot be set off against losses. The claim was dismissed by the Assessing Officer and the ld. CIT(A) on the grounds that the issue of setting off current year loss against income declared under section 115BD is debatable and cannot be rectified under section 154 of the Act. The appellant reiterated its claim of set off before the authorities, emphasizing that the current year loss was mentioned in the intimation received from CPC, Bangalore. The ld. counsel argued that the claim should be allowed due to inadvertent mistake in filing complete details. The ld. DR supported the order of the first appellate authority. The Tribunal considered the provisions of section 115BD which specify the tax treatment of income by way of dividends from a specified foreign company for Indian companies. It was noted that no deduction for any expenditure or allowance is allowed in computing income by way of dividends. The Tribunal found the interpretation of 'expenditure' or 'allowance' to cover current year loss as a debatable issue without precedents. Consequently, the Tribunal upheld the findings of the ld. CIT(A) and dismissed the appeal. In conclusion, the appeal regarding the adjustment of current year losses with income under section 115BBD of the Income tax Act, 1961 was dismissed by the Tribunal. The decision was based on the debatable nature of the issue and the lack of precedents regarding the interpretation of 'expenditure' or 'allowance' in this context.
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