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TMI Blog2019 (9) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... d C.I.T.(A) has been guided by irrelevant considerations and misappreciation of facts on record, as also section 73 of the Act and the Explanation thereto read with the law enshrined in section 154 of The Act, in as much as he has failed to appreciate that the learned Dy. C.I.T. altogether ignored, or had otherwise not considered the replies filed on record in response to the show cause notice u/s 154 of the Act. 2. In this case, the assessment under section 143(3) of the Act was completed on 31.10.2012 at a total income of Rs. 28,10,880/-, after set off of brought forward Business Loss of Rs. 42,50,204/- for assessment years 2008-09 & 2009-10 and Unabsorbed Depreciation of Rs. 49,208/- for assessment years 2008-09 & 2009-10. Further, it h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness income of Rs. 87,04,503/-, for the year under consideration, i.e., assessment year 2010-11, observing thus: "In response to the notice u/s 154 dated 13.01.2016, the assessee company has not submitted any reply till the given period, this shows that the assessee company has nothing to say in this regard, further it is pertinent to mention here that the assessee company has not appealed against the Assessment Order for A.Ys 2008-09 & 2009-10 this shows that the assessee has no objection in treating the business loss for A.Ys 2008-09 & 2009-10 as Speculative losses, therefore assessment order dated 31.10.2012 is accordingly proposed to be revised considering that the assessee company has nothing to say in this regard." 4. The ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for relevant Assessment year. Appellant accepted this finding of the AO and has also not challenged during this appellate proceeding. It is clearly not permissible as per I.T. Act. Therefore, action of AO under section 154 of the I.T. Act 1961 proposing to treat the above mistake and to rectify the same as the mistake that is apparent from record is legally correct. From the perusal of record & Computation of income, it is established that business losses for the AYs 2008-09 & 2009-10 of Rs. 19,03,967/- & Rs. 23,46,237 respectively have been incorrectly set-off from the Business Income of AY 2010-11, even though the same were determined as speculative losses in the relevant Assessment Order. As per section 73 of the I.T Act, 1961, Specu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also earned income from Rent and Dividend, etc. The assessee is a non-banking financial company (NBFC) and may be categorized as an Investment Company. The business of the assessee-company undisputedly remains the same as that in the earlier two assessment years, i.e., purchase and sale of shares. The fact that during the year under consideration, the assessee carried on the business of purchase and sale of shares stands established from the assessee's Directors' Report/Annual Report (APB-36), consisting of 30 pages, for the year under consideration. Therein, in the profit and loss account for the year ended on 31/3/2010, the following obtaining position vis-à-vis the assessee's business activity of dealing in shares during the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not consist mainly of income chargeable as "Interest on securities"', "Income from house property", "Capital gains" and "Income from other sources" and if its principal business is not the business of banking or that of granting of loans or advances, its business of purchase and sale of shares of other companies shall be deemed to be a speculative business. 9. This Explanation has been made applicable w.e.f. 1/4/2015. In the expression "the principle business of which is the business of trading in shares or banking", the phrase "trading in shares or" has been inserted over the erstwhile Explanation. 10. Section 73(1) of the Act states: "73(1) Any loss, computed in respect of a speculation business carried on by the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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