9911796707
TMI Blog1991 (11) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... --------------------- 1981-82 Rs. 16,354 Rs. 1,914 (-)Rs. 92,066 1982-83 Rs. 20,801 Rs. 3,487 (-)Rs. 2,91,099 1983-84 Rs. 20,301 Rs. 3,295 Speculation profit shown Rs. 2,34,993 Less: Set off claimed in respect of carry forward of speculation loss of assessment years 1978-79 to 1982-83 aggregating to Rs. 5,59,916, set off claimed to the extent of available profit Rs. 2,34,993--Nil 1984-85 Rs. 15,834 Rs. 1,724 (-)Rs. 31,141 ----------------------- Rs. 10,420 ----------------------- The ITO completed assessments for all these years under section 143(1) vide orders dated 30th November, 1987 in which the income was assessed on total income shown in column 2 of the above given Chart. No specific finding as to be computation or determination of speculation loss shown in the returns of income was given in the said orders. The CIT issued a show-cause notice dated 6th February, 1990 saying these assessments completed under section 143(1) are erroneous insofar as these are prejudicial to the interest of revenue. The speculation loss claimed and allowed in the aforesaid years is erroneous and has prejudiced the interest of revenue. The returns were file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the order under section 263 without properly considering the facts and submissions filed on behalf of the assessee vide reply dated 14-2-1990. It was also pointed out that the provisions of section 139(3) apply only in cases of return of losses. In the present case the total income shown in all these returns is a positive figure of income. Hence the provisions of section 139(3) are not at all applicable in the facts and circumstances of the present case. The learned counsel also placed heavy reliance on the judgment of Hon'ble Gujarat High Court in the case of Taiyabji Lukmanji v. CIT [1981] 131 ITR 643 to support his contention that once the assessee, on faith of assurances contained in various circulars issued under the Amnesty Scheme, submitted the returns of income and those were accepted under section 143(1), the department cannot invoke the provisions of section 263 as it will not only amount to a breach of promissory estoppel but in the long run it would be counter productive, as in future no one will come forward to disclose their concealed income voluntarily pursuant to such voluntary disclosure scheme or Amnesty Schemes. It was also pointed out that the aforesaid judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the returns of income submitted under the said scheme will not be scrutinised or investigated. In almost all the circulars it was mentioned that the assessees are advised to make a true and complete disclosure of income failing which the immunity assured in these circulars may not be granted. The assessments were made under section 143(1) without making the necessary and relevant enquiries and without considering the relevant provisions of law relating to carry forward of speculation losses and, therefore, are clearly erroneous and prejudicial to the interest of revenue. Such orders can be subjected to revision under section 263 of the Act. He also placed reliance on judgments in CIT v. Geeta Devi Agarwal [1988] 174 ITR 601 (Pat.), CIT v. Smt. Bibi Zaibunnisa [1990] 185 ITR 284 (Pat.), Gee Vee Enterprises v. Addl. CIT [1975] 99 ITR 375 (Delhi), Thalibai F. Jain v. ITO [1975] 101 ITR 1 (Kar.) and Addl. CIT v. Mukur Corpn. [1978] 111 ITR 312 (Guj.). He, therefore, urged that the order of the CIT should be confirmed. 5. We have carefully considered the rival submissions and have also gone through the order of the CIT as well other documents and circulars to which our attention wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in speculation business is governed by section 73 of the Act. A loss in a speculation business cannot be set off under section 70 against any income under the same head, namely, business or profession. It also cannot be set off under section 71 against income under any other head but it can be set off only against profits of speculation business as prosecution 73(1) of the Act. The loss in a speculation business can be carried forward to a subsequent year and set off only against the profits of any speculation business carried on in that year. Section 80 provides, inter alia, that no loss which has not been determined in pursuance of a return filed in accordance with the provisions of sub-section (3) of section 139 shall be carried forward and set off under section 73(2). Thus the conditions prescribed in section 80 require that a return must be filed in accordance with section 139(3) and further that the loss must be determined in pursuance of such a return. Section 139(3) provides that any assessee who intends to carry forward a business loss or a speculation loss or a loss under the head capital gains should file a return within the time allowed under sub-section (1) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble Gujarat High Court in the case of Mukur Corpn. has held that if the assessment was made without making necessary enquiries the assessment would be regarded as erroneous and prejudicial to the interest of revenue. The Hon'ble Patna High Court in the case of Smt. Bibi Zaibunnisa has held that the CIT, acting under section 263(1) was competent to interfere with an order of assessment made under section 143(1) of the Act in pursuance of the "scheme to help new tax payers under the small income group" launched by the Government. 5.3 A persual of various circulars issued under the Amnesty Scheme clearly shows that the various statutory restrictions regarding allowability of carry forward of losses including losses in speculation business such as time limit and other preconditions prescribed under sections 72, 80, 139(3), 147 and 148 and the necessity of passing a specific order under section 157 has not in any manner been relaxed either expressly or by implication. Moreover such circulars without any specific relaxation as to these restrictions cannot be interpreted in a manner so as to over ride these clear provisions of law. The assessments under section 143(1) were made withou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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