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TMI Blog2016 (7) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the order of the CIT(A)- 23, Mumbai dated 02.07.2014 for A.Y. 2009-10. 2. The facts of the case, briefly, are as under: - 2.1 The assessee filed his return of income for A.Y. 2009-10 declaring income of ₹ 25,84,335/- and claimed carry forward of business loss of ₹ 84,83,150/-. The breakup of income is as under: - (a) Salary income ₹ 11,90,000/- (b) Business loss (Rs. 83,84,370/-) (c) Short term capital gains Rs. 2,62,380/- (d) Income from other sources ₹ 11,45,030/- (e) Income from house property Rs. 5,11,186/- In the return of income, the assessee did not set off the business loss of ₹ 83,84,370/- against current years income from other heads but carried forward the same to the subsequent year. 2.2 The return was processed under section 143(1) of the Income Tax Act, 1961 (in short 'the Act') and the case was subsequently taken up for scrutiny. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e impugned order of the learned CIT(A). The learned CIT(A) dismissed the assessee s appeal vide the impugned order dated 02.07.2014 holding as under at para 2.3.7 thereof: - 2.3.7 Adverting to the facts of the present case, the assessee did not set-off his business toss against his income under any other head, excluding salary. In fact, in the computation of total income, the assessee has, under the head Details of carried forward loss , very categorically shown the loss for the A.Y. 2009-10 of ₹ 83,84,370/- and has carried forward the Loss to the next year. Hence, the assessee has on his own volition carried forward the business toss of ₹ 83,84,370/to the next year choosing not to set-off the same against any other head of income. Under the circumstances, it cannot be said that not claiming the set-off of the business loss constitutes a mistake apparent from the records within the meaning of sec.154 of the I.T. Act, 1961. The assessee did not claim set-off of this loss in the return of income filed. Rather, he has very categorically stated in the return that such loss was being carried forward. The assessee may have made a judgmental mistake in not claiming set-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be merely set off against other heads of income, except income from salary and this request for rectification, if acted on by the AO, would neither require reference to any other documents/orders nor would it be a debatable issue that requires any long drawn discussion or debate. It would be merely be rectifying a mistake apparent from the face of the record since there is no estoppal against operation of the statute. 3.2.2 In support of the above averments, the assessee, inter alia, placed reliance on the following judicial pronouncements/CBDT circulars, etc.: - (i) CBDT Circular No. 14 (XL-35) dated 11.04.1955 wherein it is conveyed that the intention and purpose of the circular is merely to emphasise that either suo moto or when a matter is brought to the notice of authorities concerned, action should be taken to see that only legitimate taxes are assessed and collected and that advantage should not be taken by the Department of an assessee s ignorance to collect more taxes from them than are legitimately due. (ii) CIT vs. Sankala Polymers (P) Ltd. (2012) 20 taxmann.com 378 (Karnataka), wherein it has been held that when a specific provision of the Act has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the assessee s application under section 154 of the Act on the ground that it is the assessee himself who had declared income of ₹ 25,84,335/- in the return of income filed, without claiming set off of business loss of ₹ 83,84,370/- and also since no revised return was filed nor such claim for set off of business loss was made in the assessment proceedings. On appeal, the learned CIT(A) upheld the AO s view. 3.4.3 Section 154 of the Act can be exercised only when there is a mistake apparent from the records of assessment; a mistake that is obvious and patent, and not something that can be established by a long drawn out process of reasoning on points on which there may be conceivably two opinions. The records, not only means the order of assessment but comprises all proceedings and record on which the assessment is based, i.e. the records of assessment, and it is to this which the assessing authorities must confine itself. We find from the details before us that in the orders of the authorities below, emphasis has been placed on the fact that the mistake of not setting off or claiming set off of the business losses of ₹ 83,84,370/- against the other heads of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them indicate that some refund or relief is due to him. This attitude would in the long run benefit the Department for it would inspire confidence in him that he may be sure of getting a square deal from the government ..... The Hon'ble Apex Court in the case of UCO Bank vs. CIT (1999) 237 ITR 889 has held that CBDT circulars are binding on Revenue and that this binding character is to the effect that even if they be found not in accordance with his interpretation of the section or they depart or deviate from such construction. 3.4.5 In view of the factual and legal matrix of the case on hand, as discussed from para 3.1 to 3.4.4 (supra), we are of the considered view that the assessee is entitled to be allowed set off of business loss of ₹ 83,84,370/-, as determined by the AO in the order of assessment for A.Y. 2009-10 dated 02.12.2011, against his other eligible heads of income in accordance with law. In our view, failure on the part of the AO to apply these provisions of the Act in respect of set off of determined business losses, while passing the order of assessment, constitutes a mistake apparent from the record. We, accordingly, direct the AO to rectify th ..... 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