Set-off of current year loss: allow house property loss against assessed income where computation error prevented proper adjustment.

The note addresses entitlement to set off a current-year loss from income from house property against assessed income when the assessment record contains an erroneous computation. It clarifies that where the claimed house property loss is undisputed on merits and the assessing officer's aggregate omitted or misstated that loss, the correct current-year loss must be admitted and adjusted against the income determined by the assessing officer, resulting in reduction of the assessed income to reflect the bona fide loss available for set-off.

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Issues: Whether the loss of Rs. 11,07,867 claimed by the assessee under the head 'income from house property' for AY 2016-17 could be set off against the assessed income (addition of Rs. 8,00,000 made under section 69A of the Income-tax Act, 1961) and whether the Assessing Officer should be directed to allow such set off.

Analysis: The assessee filed return for AY 2016-17 claiming a current year loss of Rs. 11,07,867 under the head 'income from house property' and disclosed income from other sources of Rs. 6,99,940. The Assessing Officer made an addition of Rs. 8,00,000 under section 69A read with section 115BBE and aggregated it with income from other sources, but while recording 'Losses of Current Year setoff' the Assessing Officer erroneously stated Rs. 6,99,940 instead of allowing the loss claimed. The loss claimed under the head 'income from house property' in the return was not disputed on merits by the revenue and the Tribunal examined the computation which showed the claimed loss remained unallowed due to the erroneous set off figure. The Tribunal found merit in the assessee's contention that the correct loss to be set off is Rs. 11,07,867 and that this loss arises in the current assessment year and is available for adjustment against the income determined by the Assessing Officer.

Conclusion: The loss of Rs. 11,07,867 under the head 'income from house property' is to be allowed and set off against the assessed income; the appeal is allowed in favour of the assessee.

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