TaxTMI 
TaxTMI 
2014 (4) TMI 1342
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....Court in the case of Goetz India vs. CIT (2006) 204 CTR (SC) 182. 3. The Ld. CIT(A) has erred in allowing the relief to the assessee during the appellate proceedings in respect of Short Term Capital Gains on sale of debt funds of Rs. 52,14,543/- by directing the AO to treat the said Business Income as STCG even when the said income were neither claimed by the assessee as STCG in the return of income nor the same was claimed by the assessee by way of filing revised return of income and also nor the same was claimed by the assessee during the assessment proceedings. The decision of CIT(A) is against the judgment of the Hon'ble Supreme Court in the case of Goetz India vs. CIT (2006) 204 CTR (SC) 182. 4. The Ld. CIT(A) has erred in allowing the relief to the assessee during the appellate proceedings in respect of Balancing Charges under the head Business Income of Rs. 5,90,093/- by directing the AO to treat the said Balancing Charges under the head Business Income as STCG even when the said Balancing Charges were neither claimed by the assessee as STCG in the return of income nor the same was claimed by the assessee by way of filing revised return of income and also n....
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....ove, I find the claim of the appellant to be correct. The A.O. is directed to verify the short term capital loss on sale of shares and mutual funds amounting to Rs. 1,23,14,376/- and then allow set-off of an amount of Rs. 52,14,543/- from that. This claim of appellant is allowed accordingly." Similarly, in respect of Short Term Capital Gains of Rs. 5,90,093/-, CIT(A) allowed the ground of the Assessee by observing as under : "9.2 The submission of the appellant is self explanatory. The A.O. is directed to take into account the submission of the appellant and recomputed the income accordingly. This Ground of appeal of the appellant is allowed." In respect of gain on sale of factory building amounting to Rs. 13,78,690/- CIT(A) allowed the ground of the Assessee by holding as under : 11. On the basis of above submission, the appellant has worked out its taxable income as under : "Combined effect of the rectifications mentioned above is as under : Particulars Taxable Income Short Term Capital Loss carried forward Taxable Income and Short Term Capital Loss carried forward as per order u/s. 143(3) 70,80,040 1,23,14,376 As per para (4)....
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....at the CIT(A) has correctly entertained the claim of the Assessee. 4.3 We have heard the rival submissions and carefully considered the same. We noted that in this case the Assessee has submitted the return and in the return filed, the Assessee has not shown Short Term Capital Gains on sale of debt funds amounting to Rs.52,14,543/- separately under the head Short Term Capital Gains. Similarly, the sum of Rs. 5,90,093/- claimed by the Assessee as Short Term Capital Gains in view of Sec. 50 was not shown separately. The Assessee has credited the profit received on the sale of debt funds in the Profit & Loss account and therefore this income has been shown under the head 'income from business'. The Assessee has claimed set off of brought forward business loss of Rs. 64,18,170/- but the AO since noted as per the assessment order passed u/s 143(3) for the A.Y 2008-09 dt. 12.12.2011 that the carry forward business loss is Nil, therefore, he did not allow any set off and the income of the Assessee was computed as under : Income Returned NIL Add : 1. Disallowance u/s 14A 1,58,229 2. Disallowance on account of Notional Loss claimed on A/c of "Marked ....
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....nstead of Rs. 14,72,282/- by treating the Short Term Capital Gain on sale of debt funds Rs. 52,14,543/- and factory building to the extent of Rs. 5,90,093/- as business income and allowing excess depreciation of Rs. 1,96,878/-. Without prejudice to the above grounds, 2. Claim of set off of loss allowable u/s. 70(2) of the Income Tax Act though neither made in the return of income filed nor raised during the assessment proceedings can be claimed for the first time before the CIT(A). 3. Claim of non-charging of gain on sale of factory building as per provisions of section 50 of the Income Tax Act through neither made in the return of income filed nor raised during the assessment proceedings can be claimed for the first time before the CIT(A). Your appellant craves leave to add alter, delete of above or any other ground/s of appeal." From the grounds of appeal taken by the Assessee we noted that none of the grounds taken by the Assessee relates to the issue before the AO as no ground has been taken by the Assessee in respect of any disallowance or addition made by the AO except challenging the quantum of the income determined by the AO by treating, as per....
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....see was not entitled to deduction in respect of the said payment during the A.Y 2004-05. The Assessee in the course of proceedings before the AO, however made claim of Rs. 40 lacs u/s 43B also being payment of SEBI fees but made on 9.5.2003, i.e., in the assessment year in question and submitted evidence by way of proof of payment of SEBI fees of Rs. 40 lacs. AO rejected the claim on the ground that he does not have any authority to allow any relief or deduction which has not been claimed in the return. The Hon'ble High Court did not consider the plea relating to question no. 1. CIT(A) allowed deduction to the Assessee u/s 43B as the amount was allowable u/s 43B. No contention was raised in the appeal filed by the Revenue before the Tribunal that the appellate authority had no jurisdiction to entertain the claim. The Tribunal decided in favour of the Assessee granting the said deduction. The Hon'ble High Court in this case noted from the decision of the Hon'ble Supreme Court in the case of Jute Corporation of India Ltd., 187 ITR 688 that in the case of Jute Corporation of India Ltd. the Assessee did not claim any deduction in respect of the purchase tax before the AO. S....
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....own for this purpose." [emphasis supplied]" Ultimately, the Hon'ble High Court in the case of CIT vs. Pruthvi Brokers and Shareholders Pvt. Ltd., 349 ITR 336 (supra) referring to the decision of the Full Bench in the case of Ahmedabad Electricity Co. Ltd. vs. CIT, 199 ITR 351 (Bom) relied on by the ld. AR and after considering all these decisions held as under : "In the case before us, the CIT(A) and the Tribunal have held the omission to claim the deduction of Rs.40 lakhs to be inadvertent. Both the appellate authorities held, after considering all the facts, that the assessee had inadvertently claimed a deduction of Rs.20 lakhs paid after the end of the year in question. We see no reason to interfere with this finding. We see less reason to interfere with the exercise of discretion by the appellate authorities in permitting the respondent to raise this claim. That the respondent is entitled to the deduction in law is admitted and, in any event, clearly established. In the circumstances, the respondent ought not be prejudiced. The orders of the Commissioner of Income-tax (Appeals) and the Tribunal clearly indicate that both the appellate authorities had....
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....on to entertain the claim. In the case of the Assessee, we noted, the Assessee has not made any claim during the course of the assessment proceedings that the income returned by him under the head 'business income' on the sale of Debt funds is not business income but STCG. Similarly, no claim was made in respect of STCG for the sum of Rs. 5,90,093/-. It cannot be said apparently that the amount earned by the Assessee was STCG as no such evidence by way of final accounts or audit report was brought to our knowledge. It is highly debatable whether income was assessable under head Capital Gains or under the head Income from Business. The Assessee himself has returned income under the head 'Business income' and the same was assessed as such. Even in the grounds of appeal taken before the CIT(A), there is no whisper that the claim was made before the AO if we look into the ground no. 1 taken before the CIT(A). On the basis of the facts, it cannot be said that income was apparently assessable under the head 'income from Capital Gains'. It is a case where the facts are to be investigated. Not only this, even in the case of Jute Corporation of India Ltd., 187 ITR 688 (supra) which was r....