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TMI Blog2020 (4) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... He issued sec.148 notice dated 12.09.2014 and framed the re-assessment in question dated 16.03.2016 assessing the assessee's total taxable income at Rs.121,49,582/- as reduced by long term capital gains adjustments carried forward from the preceding assessment year to the tune of Rs.40,31,675/-; coming to net assessed income of Rs.81,17,907/-. 3. Both the learned representatives submitted at this stage that it is the said reassessment which forms subject-matter of the PCIT's exercise of sec. 263 revision jurisdiction as under:- "2. Subsequently, the assessment records of the assessee were called for & on the basis of the verification of the material available on records, it was found that the order assessment was erroneous so far as it is prejudicial to the interest of revenue on the following grounds:- It is noticed that Long Term Capital loss of Rs. 40,31,675/- relating to previous year was set off with the total taxable income. From the details available on record it is seen that the losses were pertaining to A.Y2005-06 for Rs. 20,46,281/-, A.Y 2010-11 for Rs. 5,38,147/- and A.Y 2011-12 for Rs. 14, 47, 247/-. Further, on perusal of assessment record it revealed that Long Te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not distinguish between losses from shares/M.F. income of which qualify u/s. 10(38) or other losses. Thus, the profit on transfer of shares/M.F. qualifying u/s. 10(38) may be exempt but it does not make, corresponding LTCL to be ineligible to be considered as a loss. Thus, the LTCL arising from transfer of equity shares/M.F. qualifying u/s. 10(38), can be adjusted from LTCG of same year or can be carried forward & set-off against L TCG of future years. The impugned assessment order is passed u/s. 1471143(3) on 16.03.2017. In reasons recorded for reopening the issue of claim of excess set-off of carry forward LTCL was raised. The assessee's claim of set-off of carry forward LTCL was examined and then the same was allowed at Rs. 40,31,675. The reassessment was completed on 16.03.2016 after granting hearing and examining and verifying all necessary details and information relating to reassessment. Thus, it can be presumed that the set-off of LTCL has been done with full knowledge and conscious decision that the same is allowable. Now, to hold differently would be a change of opinion on the part of Dept. In 263 proceedings, error prejudicial to revenue are to be revised but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord for disallowing the set-off of earlier year's losses of Rs. 40,31,675. It was pointed out that this difference of opinion is not a mistake apparent from record and the proceedings were dropped. Now, the same difference of opinion is being sought to be imposed on assessee in the name of erroneous and prejudicial proceedings, which it is not. Reliance is placed on following: 1. G.K. Rammurthy V JCIT (ITAT-Mum) Long Term capital loss (LTCL) as per computation after charging STT is an additional reason for allowing carry forward & set-off of this loss against other income. 2. Raptakos-Brett case - ITAT online - ITAT Mumbai. Hope, you will find the aforesaid in order." 4. The submission of the Id. AIR of the assessee considered. The submission of the Id. AIR of the assessee that the LTCL arising from transfer of equity shares/M.F. qualifying u/s.10(38) can be adjusted from L TCG of same year or can be carried forward & set-off against LTCG of future years is not tenable. In this regard submission of assessee relying upon the various juridical pronouncement is not applicable in this particular issue as the same are prima facie distinguishable on facts. The exempted L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound to result in erroneous and prejudicial order. Where the relevant enquiry was not undertaken, as in the case, the order is erroneous and prejudicial too and therefore revisable. Investigation should always be faithful and fruitful. Unless all fruitful areas or enquiry are pursued the enquiry cannot be said to have been faithfully conducted. " The Hon'ble Supreme Court, further, in the case of Rampyari Devi Saraogi-Vs- CIT(1968) 67 ITR 87(SC) and Smt. Tara Devi Aggarwal-Vs-CIT(1973) 85 ITR 323 (SC) has held that in absence of proper enquiries, the assessment order would become erroneous and prejudicial to the interest of the revenue. The Hon'ble Delhi High Court in the case of Gee Vee Enterprise-Vs-Addl. CIT(1975) 99 ITR 375 has also held as under:- "The reason is obvious. The position and function of the income tax officer is very different from that of a Civil Court. The statements made in a pleading proved by the minimum amount of evidence may be accepted by a Civil Court in the absence of rebuttal. The Civil Court is neutral. It simply gives decision on the basis of pleading and evidence which comes before it. The income tax officer is not only an adjudicator b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly upon for substantiating its own claim. Thereafter a fresh assessment order may be passed in accordance with the relevant provisions of Taw." 4. Learned authorized representative vehemently contended during the course of hearing that the PCIT has erred in law and on facts in assuming his revision jurisdiction for the purpose of holding the above regular assessment / re-assessment as erroneous causing prejudice to the interest of the Revenue on the sole issue of the set off long term capital loss (LTCL) pertaining to assessment years 2005-06, 2010-11 & 2011-12; respectively. His further case is that such LTCL is arising out of transfer of shares and securities; after payment of securities transaction tax (STT), is very well allowable to be carried forward as per this tribunal's co-ordinate bench's decision in M/s United Investments vs. ACIT, Circle-40, Kolkata ITA No.511/Kol/2017 decided on 01.07.2019. His plea case therefore is that the impugned regular assessment framed by allowing the assessee's benefit of set off long term capital loss(es) deserves to be restored. 5. Learned CIT-DR has strongly supported the PCIT's revision direction under challenge that the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X
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