2005 (4) TMI 656

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....not been under section 139(4). The facts of the case are that the assessee filed the first return on 24-11-1994 declaring an income of Rs. 5,08,450. This return was not filed within time allowed under sub-section (1) of section 139. But the same was filed under sub-section (4) of section 139. Subsequently, the assessee filed revised return on 12-2-1997 declaring an income of Rs. 29,026. In the revised return, the assessee had claimed that amount of Rs. 4,81,445 was a speculative profit which required to be set off against speculative loss brought forward from the earlier assessment year. The Assessing Officer completed assessment under section 143(3) on 13-3-1997 on an income of Rs. 1,26,620 and allowed the benefit of brought forward specul....

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....d by the assessee on 12-2-1997 was invalid return, the computation of income filed alongwith the said return could not be just ignored without verifying the genuineness. Reliance was also placed on the judgment of Hon'ble Supreme Court in the case of Bihar State Co-op. Bank Ltd. v. CIT [1960] 39 ITR 114 and the circular of C.B.D.T. No. 14(XI/3) of 1955, dated 11-4-1955 where the Field Officers were directed not to take advantage of ignorance of an assessee as to his rights. They were also directed to assist the taxpayers in every reasonable way, particularly in the matter of claiming and securing reliefs and allowing the claim, if those were admissible under the law. The learned CIT(A) held that the return filed on 12-2-1997 could not b....

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....culative profit and should be treated as such and brought forward losses if any should be set off as per law. My this finding is also prompted by the fact that the Assessing Officer in fact has admitted that income of Rs. 4,81,450 is income from speculative profit and he was rightly held so in para 2 of his assessment order dated 13-3-1997. The revenue is aggrieved by the order of the CIT(A). Hence, these appeals before us. 3. The learned DR heavily relied on the order of the Assessing Officer and submitted that since original return was not filed within time allowed under section 139(1), the revised return filed by the assessee was invalid and should have not been acted upon by the Assessing Officer. He relied on the judgment of Hon'....

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....of set off of brought forward speculative loss against the speculative profit of the current assessment year could have been ignored by the Assessing Officer. The purpose of assessment is to determine the correct income of the assessee in accordance with the provisions of the Act. In case, the assessee inadvertently failed to claim set off of brought forward speculative loss against the speculative profit, such claim could be made during the course of assessment proceedings. It was not even necessary for the assessee to file a revised return. The assessee could make such claim for allowing set off of brought forward loss during the course of assessment proceedings because the claim is open to scrutiny and in any case was determined in the e....