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TMI Blog2017 (3) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... heard the parties and perused the record. The assessee filed her return of income for A.Y. 2009-10 on 29.9.2009 i.e. beyond the time allowed u/s. 139(1) of the Act. The assessee declared short term capital loss of Rs. 13,86,765/- and sought to carry forward the same to the succeeding year. The short term capital loss was ultimately revised to Rs. 10,32,489/- during the course of assessment proceedings. Since the return of income has been filed beyond the period specified u/s. 139(1) of the Act, the Assessing Officer refused to allow carry forward of loss in view of the restriction placed u/s. 139(3) read with section 80 of the Act. The assessee challenged the decision of the Assessing Officer by filing the appeal before the learned CIT(A), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sub-section (2) of section 73 or [sub-section (1) or sub-section (3) of section 74] [or subsection (3) of section 74A]. Section 139(3): (3) If any person, who [****] has sustained a loss in any previous year under the head "Profits and gains of business or profession" or under the head "Capital gains" and claims that the loss or any part thereof should be carried forward under subsection (1) of sect/on 72 or sub-section (2) of section 73, or [sub-section (1) or sub-section (3) of section 74],2-[or subsection (3) of section 74A], he may furnish, within the time al/owed under sub-section (1)[***], a return of loss in the prescribed form and verified in the prescribed manner and containing such other particulars as may be prescribed, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has returned a loss" has used expression" If any person who has sustained a loss" which suggests that provisions of section 139(3) will apply even where assessee has 'sustained a loss' irrespective whether the total income returned by the assessee is a loss or not. Further section 139(3) seeks to put restriction of carry forward of losses only qua business income or capital gain only whereas the total income of any assessee would comprises of all heads of income including salary, income from house property, business, capital gains, income from other sources, etc. Thus it is clear that the legislature has deliberately not used the words total income or loss in the return while putting restriction under 139(3) and it has selectively ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of loss under business/capital gains would be still entitled to carry forward such loss even if return is beyond time limit prescribed under section 139(1), whereas another person under same situation of delayed return, who does not have any other income except loss under business/capital gains would become disentitled to carry forward such loss u/s 139(3). The mischief sought to be avoided by bringing provisions of 139(3) will therefore be defeated in the former case leading to absurdity. Therefore the provisions of section 139(3) will apply even to the case where there is a loss under the head business/profession or capital gains, even if the total income returned is a positive income. Hence the short term capital loss computed by assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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