AI Drafter 
TaxTMI 
TaxTMI 
2010 (9) TMI 1237
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....the provisions made in the diminution of the value of investment was erroneously reduced from the costs of acquisition of investment by the appellant, the said amount was required to be added back to the costs of acquisition for computing the capital gains as per the provisions of the Act. 1.2. That the CIT(A) erred on facts and in law in not appreciating that there is no estoppel in law and the revised computation of income and the revised financial statements submitted by the appellant during the course of assessment proceedings to rectify the above mistake, were required to be considered by the CIT(A), notwithstanding that the same could not be considered by the assessing officer in view of the bar of limitation under section 139(5) of the Act. 2. That the CIT(A) erred on facts and in law in confirming the action of the assessing officer in not allowing short term capital loss amounting to Rs. 2,22,87,145, arising on sale of mutual funds, invoking section 94(7) of the Act. 2.1 That the CIT(A) erred on facts and in law in confirming the action of the assessing officer in holding that the appellant has not held the aforesaid mutual funds for the specified period prior to ....
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....aking the reduced value of the cost of investment in mutual fund as declared in the books of account was offered for tax as income under the head 'short term capital gains' in the original return of income. He pleaded that the income under the head 'capital gains' has to be computed as per the provisions of section 45 read with section 48 of the Act, by reducing actual cost of acquisition of the asset from the sale consideration and during the assessment proceedings, the appellant realized the mistake which occurred while filing the original return of income and the revised computation was filed on 10.10.2005 by declaring short term capital loss amounting to Rs. 2,19,18,461/-. The financial results of the assessee were revised by calling extra ordinary general body meeting on 17.9.2005 for reversing the amount of provision made for diminution in the value of investment as on 31.3.2002, as per the requirement of Accounting Standard-13. The Assessing Officer was not justified by holding that as per the law, assessee has no right to revise the income without filing the revised return. Learned AR also relied on the following judgments :- (i) Hon'ble Supreme Court decision in the....
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....9;s observations that the ITO had been too technical are clearly justified, because, if in fact and in law, the assessee was entitled to a deduction which would have ultimately affected his or her total taxable income, the assessee could not be assessed on a larger income." (vi) Hon'ble Gujarat High Court in the case of Chokshi Metal Refinery vs. CIT 107 ITR 63 (Guj.) observed as under :- "Before parting with the case, we must point out that in the light of the decision of the Supreme Court in Navnit Lal C. Javeri's case [1965] 56 ITR 198 (SC), it is incumbent on the Income-tax Officers to follow the circular of the Central Board of Revenue of 1955 to which we have referred above and to draw the attention of the assessee concerned to all the reliefs and refunds to which the assessee seems to be entitled on the facts of the case even though the assessee might have omitted to claim refund or relief." He also relied on the circular no.14(XL-35) dated 11.4.1955 where para 3 reads as under : "Officers of the department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, pa....
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..... He also submitted that once the assessee is in a position to show that the assessee has been over assessed under the provisions of the Act, regardless to the fact that the over assessment is as a result of assessee's own mistake or otherwise, the CIT (A) has all the powers to correct such an assessment. Therefore, the CIT (A) was duty bound to give relief to the assessee, which he has not done. Since the assessee failed to make the revised claim within the statutory period of one year from the end of the assessment year u/s 139(5) of the Act, the assessee should not be penalized for the same. The assessing authority under the Act should collect the tax only as provided in the Act and if by mistake or misconception the assessee has over assessed then the assessing authorities are to assist the assessee to ensure that only legitimate taxes are collected. 5. On the other hand, the learned DR relied on the orders of authorities below and also submitted that in view of the Hon'ble Supreme Court decision in the case of Goetze (I) Ltd. vs. CIT 284 ITR 323 (SC), the assessing authority has no authority to entertain the assessee's claim. 6. After hearing both the sides on the is....
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....se of Goetze (I) Limited, cited supra, the Assessing Officer was justified in not entertaining the claim of the assessee in the assessment proceedings. However, in view of the same decision of Hon'ble Supreme Court, the ITAT has the power to entertain such claim of the assessee. The claim of the assessee was bonafide in view of the Accounting Standards and for working out the taxable income. The CIT (A) should have admitted the assessee's claim and would have granted the relief. Since he had not done so we direct to do so. In the revised computation, the assessee has claimed that short-term capital loss is to be carried forward. In this regard, we would like to hold that it is a well-settled proposition of law that what cannot be done 'per directum is not permissible to be done per obliquum', meaning thereby, whatever is prohibited by law to be done, cannot legally be affected by an indirect and circuitous contrivance on the principle of 'quando aliquid prohibetur, prohibetur at omne per quod devenitur ad illu.' In Jagir Singh vs. Ranbir Singh, AIR 1979 SC 381, the apex court has observed that an authority cannot be permitted to evade a law by 'shift or contrivance'. While deci....
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....plain why the loss of Rs. 2,62,50,836/- arising to it on account of purchase and sale of the above units, to the extent this loss does not exceed the amount of divided or income received on such unit be not ignored, as per provisions of Section 94(7) of the I.T. Act. The assessee, vide reply dated 17th November, 2005 submitted that in the case of the assessee company, the sale/transfer of units of mutual funds took place after three months and not within three months and that in view of this situation., provision of Section 94(7) does not apply whereby the loss that arose on such transfer cannot be ignored. The above contention of the assessee has been considered. While it is true that the amendment to Section 94(7) that records that 'such person sells or transfers sells or transfers such unit within a period of nine months after the record date applies with effect from 1-4-2005, i.e. A.Y. 2004-05, it is important to closely study the import of the terms within a period of three months after such date mentioned therein in subsection 7 of Section 94 which cover the assessee's case for A.Y. 2002-03, in this case." The Income-tax Act does not define "month....
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....rary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning." (ii) In the case of CIT Vs. Kanpur Rattan Cotton Mills Co. Ltd., 97 ITR 285, the meaning of the word 'month' has been discussed at length and it was held that the term 'month' should be construed as full calendar month. (iii) The AR has also relied on the use of the term month in Negotiable Instruments Act and Bombay Rent Act. The AR has also stated that interpretation drawn should be favourable to assessee wherever two views are possible as held by the Hon'ble Supreme Court in the case of CIT Vs. Vegetable Products 88 ITR 192. The submissions of the AR has been considered at length. As such the word month is used for existing month but can be for particular month of January to Feb. etc. and not the next 30 days covering the calendar month. The calendar month taken from 1st of every month for next 30 days, in common parlance. This is called a month. Hence the AO's stand regarding the same is confirmed. 8.2 Learned AR further submitted that the CIT (A) has taken her own view for defining the month by holding that the calendar month should be taken from ....