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TMI Blog2016 (11) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... , accordingly, direct the AO to rectify the order of assessment for A.Y. 2008-09 dated 10.12.2009 by allowing the assessee set off of the business losses of ₹ 5,04,26,202/- against other eligible heads of income in accordance with the law. - Decided in favour of assessee - ITA No. 7761/Mum/2014 - - - Dated:- 23-9-2016 - Shri Jason P. Boaz, Accountant Member and Shri Sandeep Gosain, Judicial Member For The Appellant : Shri Deepak N. Kanabar For The Respondent : Shri Rajneesh K. Arvind ORDER Per Jason P. Boaz, A.M. This appeal by the assessee is directed against the order of the CIT(A)- 23, Mumbai dated 07.10.2014 for A.Y. 2008-09. 2. The facts of the case, briefly, are as under: - 2.1 The assessee filed his return of income for A.Y. 2008-09 declaring income of ₹ 1,22,09,311/- and claimed carry forward of business loss of ₹ 5,04,26,202/-. The breakup of income is as under: - (a) Salary income ₹ 61,90,000/- (b) Business loss (Rs. 5,04,26,202/-) (c) Short term capital gains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income was processed under section 143(1) of the Act in accordance with the return of income filed for A.Y. 2008-09, there was no mistake apparent on record in the order of assessment. In that view of the matter, the AO rejected the assessee s application for rectification under section 154 of the Act on both the issues raised. 2.4 Aggrieved by the order under section 154 of the Act dated 22.08.2012 for A.Y. 2008-09 passed by the AO rejecting his rectification application dated 22.08.2012, the assessee filed an appeal before the CIT (Appeals)-23, Mumbai making submissions vide letter dated 08.09.2014 which are extracted in the impugned order of the learned CIT(A). The learned CIT(A) dismissed the assessee s appeal vide the impugned order dated 07.10.2014 holding as under at paras 2.4 to 2.6 thereof: - 2.4 I have considered the facts of the case and the submissions made by the assessee. It is pertinent to note that the return of income of the assessee for the A.Y. 2008-09 was processed under section 143(1) of the Act and no order under section 143(3) was passed. In order to decide the issue, it would be imperative to examine the provisions of section 143(1) of the I.T. Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f in the return of income and subsequently the AO rejected the application u/s 154 for rectification of assessment for allowing set-off of Business loss against other heads of income. 3.2.1 The learned A.R. for the assessee was heard in support of the grounds raised and reiterated the submissions put forth in proceedings before the CIT(A) vide letter dated 18.09.2014. It was submitted that section 154 of the Act permits rectification of an order either on the suo moto action of the authority concerned or where any such mistake apparent on the fact of the record is brought to the notice of the authority concerned, inter alia, by the assessee. According to the learned A.R. for the assessee, in the case of hand, in the computation attached with the return of income for A.Y. 2008- 09, the assessee has returned loss of ₹ 5,04,26,202/- but had inadvertently not set off the same against other heads of income, i.e. income from house property and other sources. It is contended that since the returned business loss of ₹ 5,04,26,202/- has been already accepted by the AO while processing the return of income under section 143(1) of the Act vide order dated 10.12.2009, the bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord are that the assessee filed its return of income for A.Y. 2008-09 declaring income of ₹ 1,22,09,311/- comprising business loss of ₹ 5,04,26,202/-, STCG of ₹ 44,12,003/-, long term capital gains of ₹ 1,60,121/-, income from other sources of ₹ 11,76,849/-, house property income of ₹ 3,80,338/- and salary income of ₹ 61,90.000/-. The return of income was processed under section 143(1) of the Act by order dated 10.12.2009 wherein the assessee s income was determined at ₹ 1,23,19,310/- due to certain additions/disallowances to the returned income. The business loss of ₹ 5,04,26,202/- was accepted by the AO as returned by the assessee but set off was not given. 3.4.2 The assessee, vide letter dated 26.06.2012, preferred an application for rectification of the order of assessment for A.Y. 2008-09 dated 10.12.2009, submitting that he had realized that while filing the return of income and computation of income he had inadvertently omitted to set off the business loss of ₹ 5,04,26,202/- against income from other heads (except salary), i.e. STCG, LTCG, income from other sources and income from house property and that interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntage of mistakes admittedly committed by the assessee under a mistaken belief of error, by levying tax or a higher amount/rate. In the case on hand, the assessee admittedly, inadvertently, did not claim set off of business losses against certain heads of income in the return of income. While processing the assessee s return of income for A.Y. 2008-09 under section 143(1) of the Act, the AO after accepting/ determining the business loss of the assessee at ₹ 5,04,26,202/-, was duty bound in accordance with law as laid down in the provisions of the Act to have allowed set off of the business loss to the extent permissible against other heads of income and carry forward of the eligible balance if any. The Hon'ble Bombay High Court in the case of Dattatraye Gopal Bhotte (1984) 150 ITR 460 has noted the relevant portion of the CBDT Circular 14 of 1955 issued to its officers which is extracted hereunder: - ..... Officers of the Department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist taxpayer in every reasonable way, particularly in the matter of claiming and securing any relief and in this regard the officers sho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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