RAMESH R.SHAH, MUMBAI v. ACIT 20(2), MUMBAI

ITA 4312/MUM/2009 | 2005-2006
Pronouncement Date: 29-07-2011 | Result: Allowed

Appeal Details

RSA Number 431219914 RSA 2009
Assessee PAN AAGPS8024G
Bench Mumbai
Appeal Number ITA 4312/MUM/2009
Duration Of Justice 2 year(s) 13 day(s)
Appellant RAMESH R.SHAH, MUMBAI
Respondent ACIT 20(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 29-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 29-07-2011
Date Of Final Hearing 19-10-2010
Next Hearing Date 19-10-2010
Assessment Year 2005-2006
Appeal Filed On 16-07-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: MUMBAI BEFORE SHRI R.S. SYAL ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR JUDICIAL MEMBER ITA NO.4312/MUM/2009 (ASSESSMENT YEAR: 2005-06) MR. RAMESH R. SHAH A-7 NANDDHAM INDL. ESTATE MAROLMAROSHI RD. ANDHERI (E) MUMBAI ....... APPELLANT VS ACIT 20(2) MUMBAI ..... RESPONDENT PAN: AAGPS 8024 G APPELLANT BY: DR. K. SHIVARAM SHRI PARAS S. SAVLA RESPONDENT BY: SHRI R.K. JALANI DATE OF HEARING: 28.06.2011 DATE OF PRONOUNCEMENT: 29.07.2011 O R D E R PER R.S. PADVEKAR JM: IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE IMPU GNED ORDER OF THE LD. CIT (A)-20 MUMBAI DATED 20.4.2005 FOR TH E A.Y. 2005-06. THE ASSESSEE HAS TAKEN THE FOLLOWING EFFECTIVE GROU ND:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ORDER OF ACIT -20(2 ) REFUSING CARRIED FORWARD OF LOSS DETERMINED U/S.74 R/W. S.80 OF RS 1 82 27 039. THE SAME MAY BE ALLOWED TO BE CARRIED FORWARD. ITA 4312/MUM/2009 MR. RAMESH R. SHAH 2 2. THE FACTS WHICH REVEAL FROM THE RECORD ARE AS UN DER. THE ASSESSEE IS AN INDIVIDUAL AND FILED THE ORIGINAL RE TURN OF INCOME U/S.139(1) OF THE ACT ON 28.10.2005 DECLARING THE T OTAL INCOME AT RS 94 09.046/-. THE SAID RETURN WAS PROCESSED U/S.143 (1) OF THE ACT ON 15.12.2005. THE ASSESSEE FILED THE REVISED RETURN ON 28.3.2006 CLAIMING LONG-TERM-CAPITAL LOSS AT RS 1 82 27 039/- AND THE SAID LOSS WAS CLAIMED TO BE CARRIED FORWARD U/S.74 OF THE I.T . ACT. 3. THE A.O. HAS RESERVATION IN ALLOWING THE CLAIM O F THE ASSESSEE TO CARRY FORWARD THE LONG-TERM-CAPITAL-LOSS AS IN HIS OPINION AS PER PROVISIONS OF SEC. 139(1) 139(3) AND SEC. 80 OF TH E ACT THE SAME IS NOT PERMISSIBLE AS THE REVISED RETURN OF INCOME WAS FIL ED ON 28.03.2006. THE A.O. ALSO REFERRED TO SEC.80 OF THE ACT AND OBS ERVED THAT NO LOSS WHICH HAS NOT BEEN DETERMINED IN PURSUANCE OF RETUR N FILED IN ACCORDANCE WITH THE PROVISIONS OF SUB-SEC.(3) OF SE C.139 OF THE ACT SHALL BE ALLOWED TO BE CARRIED FORWARD AND SET OFF U/S.74 OF THE ACT. HE WAS OF THE FURTHER OPINION THAT REVISED RETURN O F LOSS SHOULD HAVE BEEN FILED U/S.139(1) OF THE ACT. IN THE REVISED R ETURN THE ASSESSEE CLAIMED THE LOSS FROM THE SALE OF SHARES OF PHOLX P HARMA LTD. WHICH WAS NEVER CLAIMED IN THE ORIGINAL RETURN FILED U/S. 139(1) OF THE ACT AND IN THE REVISED RETURN THE ASSESSEE CLAIMED THE LOS S FOR THE FIRST TIME WHICH WAS FILED ON 28.03.2006. THE A.O. REFERRED T O THE DECISION IN THE CASE OF M. NARENDRANATH (INDL) VS. ACIT 94 TTJ 284 (VISAKHA). THE ASSESSEE CHALLENGED THE A.O.S ORDER DECLINING TO A LLOW CARRY FORWARD OF THE LONG-TERM-CAPITAL-LOSS CLAIMED IN THE REVISE D RETURN WHICH WAS OF RS 1 82 27 039/- BEFORE THE LD. CIT (A). 4. THE LD. CIT (A) CONCUR WITH THE VIEW TAKEN BY TH E A.O. AND DECLINED TO ALLOW CARRY FORWARD OF THE SAID LOSS CL AIMED BY THE ASSESSEE IN THE REVISED RETURN. THE REASONS GIVEN BY THE LD. CIT (A) ARE AS UNDER:- 2.3 I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORD ER AND THE SUBMISSIONS AND ARGUMENTS OF THE AR AS MENTIONED AB OVE FOR ITA 4312/MUM/2009 MR. RAMESH R. SHAH 3 DECIDING THIS ISSUE. FROM THE BASIC FACTS AVAILABL E ON RECORD I FIND THAT THE APPELLANT HAS FILED HIS ORIGINAL RETU RN OF INCOME U/S.139(1) OF THE ACT WITH A POSITIVE INCOME OF RS 94 09 046/-. THE SAID RETURN IS FILED IN TIME AS REQUIRED U/S.13 9(1) OF THE ACT I.E. AS ON 28.10.2005. THE APPELLANT HAS REVISED THE SAID RETURN ON 28.03.2006 CLAIMING A LONG TERM CAPITAL LOSS OF RS 1 82 27 039/- ON ACCOUNT OF SALE OF SHARES OF PHILO X PHARMA LTD. THEREFORE IN VIEW OF THESE FACTS I AM OF THE CONS IDERED OPINION THAT THE AR IS IN CORRECT TO ARGUE THAT THE ORIGINA L RETURN OF INCOME IS FILED U/S.139(1) OF THE ACT. BESIDES THE APPELL ANT HAS ALSO CLAIMED THE CARRY FORWARD OF THE SAME TO THE NEXT A SSESSMENT YEAR U/S.74 OF THE ACT. HOWEVER THE AO HAS HELD T HAT THE SAID CLAIM OF THE APPELLANT FOR THE CARRY FORWARD OF THE LOSS RETURNED FOR THE FIRST TIME IN HIS REVISED RETURN OF INCOME IS NOT ELIGIBLE FOR CARRY FORWARD TO THE NEXT ASSESSMENT YEAR AS PER TH E PROVISIONS OF SEC.80 OF THE ACT. THE PROVISIONS OF SEC.80 REL EVANT FOR THIS PURPOSE IS REPRODUCED AS UNDER:- NOTWITHSTANDING ANYTHING CONTAINED IN THIS CHAPTER NO LOSS WHICH HAS NOT BEEN DETERMINED IN PURSUANCE OF A RETURN FILED [IN ACCORDANCE WITH THE PROVISIONS OF SUB-SEC.(3) OF SEC.139] SHALL BE CARRIED FORWARD AND SET OFF U NDER SUB- SEC.(1) OF SEC.72 OR SUB-SEC.(2) OF SEC.73 OR SUB-S EC.(1)[OR SUB-SEC.(3)] OF SEC.74 [OR SUB-SEC.(3) OF SEC.74A] . 5. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE RECORDS. THE LD. COUNSEL TOOK US THROUGH THE P APER BOOK TO DEMONSTRATE THAT THERE WAS CALCULATION MISTAKE DUE TO WHICH THE LOSS ON THE SALE OF THE SHARES OF PHILOX PHARMA LTD. REM AINED TO BE CLAIMED IN ITS ORIGINAL RETURN. HE FURTHER SUBMITS THAT OR IGINAL RETURN FILED BY THE ASSESSEE IS RETURN OF THE POSITIVE INCOME AND E VEN THE REVISED ITA 4312/MUM/2009 MR. RAMESH R. SHAH 4 RETURN FILED BY THE ASSESSEE IS ALSO DECLARING THE POSITIVE INCOME. AS THE ASSESSEE CANNOT BE SET OFF THE LONG-TERM-CAPITA L-LOSS ON THE SALE OF SHARES IN THE A.Y. 2005-06 AND HENCE THE SAME IS C LAIMED TO BE CARRY FORWARD TO THE SUBSEQUENT ASSESSMENT YEAR. HE FURT HER SUBMITS THAT THE DECISION RELIED ON BY THE A.O. AS WELL AS THE L D. CIT (A) IN THE CASE OF M. NARENDRANATH (INDL) (SUPRA) IS NOT CORRECT. HE FURTHER PLEADED FOR ALLOWING THE CLAIM OF CARRY FORWARD OF LOSS LON G-TERM-CAPITAL-LOSS. PER CONTRA THE LD. D.R. SUPPORTED THE ORDERS OF TH E AUTHORITIES BELOW. 7. WE FIND THAT THE ORIGINAL RETURN OF INCOME IS FI LED BY THE ASSESSEE DECLARING THE POSITIVE INCOME WELL WITHIN THE TIME LIMIT PRESCRIBED U/S.139(1) OF THE ACT. FOR THE SAKE CON VENIENCE WE REPRODUCE RELEVANT PROVISIONS OF SEC.139 OF THE ACT WHICH READ AS UNDER:- (1) EVERY PERSON (A) BEING A COMPANY OR A FIRM; OR (B) BEING A PERSON OTHER THAN A COMPANY OR A FIRM IF HIS TOTAL INCOME OR THE TOTAL INCOME OF ANY OTHER PERSON IN R ESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PR EVIOUS YEAR EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME-TAX SHALL ON OR BEFORE THE DUE DATE FURNI SH A RETURN OF HIS INCOME OR THE INCOME OF SUCH OTHER PERSON DURIN G THE PREVIOUS YEAR IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PART ICULARS AS MAY BE PRESCRIBED : PROVIDED THAT A PERSON REFERRED TO IN CLAUSE (B) WHO IS NO T REQUIRED TO FURNISH A RETURN UNDER THIS SUB-SEC.AND RESIDING IN SUCH AREA AS MAY BE SPECIFIED BY THE BOARD IN THIS BEHALF BY NOTIFICATION IN THE OFFICIAL GAZETTE AND WHO DURIN G THE PREVIOUS YEAR INCURS AN EXPENDITURE OF FIFTY THOUSAND RUPEES OR MORE TOWARDS CONSUMPTION OF ELECTRICITY OR AT ANY TIME D URING THE PREVIOUS YEAR FULFILS ANY ONE OF THE FOLLOWING COND ITIONS NAMELY: (I) IS IN OCCUPATION OF AN IMMOVABLE PROPERTY EXCE EDING A SPECIFIED FLOOR AREA WHETHER BY WAY OF OWNERSHIP TENANCY OR OTHERWISE AS MAY BE SPECIFIED BY THE BOARD IN T HIS BEHALF; OR; (II) IS THE OWNER OR THE LESSEE OF A MOTOR VEHIC LE OTHER THAN A TWO-WHEELED MOTOR VEHICLE WHETHER HAVING AN Y ITA 4312/MUM/2009 MR. RAMESH R. SHAH 5 DETACHABLE SIDE CAR HAVING EXTRA WHEEL ATTACHED TO SUCH TWO- WHEELED MOTOR VEHICLE OR NOT; OR (III) [***] (IV) HAS INCURRED EXPENDITURE FOR HIMSELF OR ANY OTHER PERSON ON TRAVEL TO ANY FOREIGN COUNTRY; OR (V) IS THE HOLDER OF A CREDIT CARD NOT BEING AN ADD-ON CARD ISSUED BY ANY BANK OR INSTITUTION; OR (VI) IS A MEMBER OF A CLUB WHERE ENTRANCE FEE CHA RGED IS TWENTY-FIVE THOUSAND RUPEES OR MORE SHALL FURNISH A RETURN OF HIS INCOME DURING ANY PR EVIOUS YEAR ENDING BEFORE THE 1ST DAY OF APRIL 2005 ON OR BEF ORE THE DUE DATE IN THE PRESCRIBED FORM AND VERIFIED IN THE PRE SCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED : PROVIDED FURTHER THAT THE CENTRAL GOVERNMENT MAY BY NOTIFICATION IN THE OFFICIAL GAZETTE SPECIFY THE C LASS OR CLASSES OF PERSONS TO WHOM THE PROVISIONS OF THE FIRST PROV ISO SHALL NOT APPLY: PROVIDED ALSO THAT EVERY COMPANY OR A FIRM SHALL FURNISH ON OR BEFORE THE DUE DATE THE RETURN IN RESPECT OF ITS IN COME OR LOSS IN EVERY PREVIOUS YEAR : PROVIDED ALSO THAT EVERY PERSON BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY OR AN ASSOCIATION OF PERSONS OR A BODY OF INDIVIDUALS WHETHER INCORPORATED OR NOT OR AN ARTIFICIAL JURIDICAL PERSON IF HIS TOTAL INCOME OR THE TOTAL INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE U NDER THIS ACT DURING THE PREVIOUS YEAR WITHOUT GIVING EFFECT TO THE PROVISIONS OF SEC.10A OR SEC.10B OR SEC.10BA OR CHAPTER VI-A E XCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOM E-TAX SHALL ON OR BEFORE THE DUE DATE FURNISH A RETURN OF HIS INCOME OR THE INCOME OF SUCH OTHER PERSON DURING THE PREVI OUS YEAR IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRES CRIBED. EXPLANATION 1.FOR THE PURPOSES OF THIS SUB-SECTION THE EXPRESSION MOTOR VEHICLE SHALL HAVE THE MEANING A SSIGNED TO IT IN CLAUSE (28) OF SEC.2 OF THE MOTOR VEHICLES AC T 1988 (59 OF 1988). EXPLANATION 2.IN THIS SUB-SECTION DUE DATE MEAN S (A) WHERE THE ASSESSEE IS (I) A COMPANY; OR (II) A PERSON (OTHER THAN A COMPANY) WHOSE ACCOUNT S ARE REQUIRED TO BE AUDITED UNDER THIS ACT OR UNDER ANY OTHER LAW FOR THE TIME BEING IN FORCE; OR (III) A WORKING PARTNER OF A FIRM WHOSE ACCOUNTS A RE REQUIRED TO BE AUDITED UNDER THIS ACT OR UNDER ANY OTHER LAW FO R THE TIME BEING IN FORCE THE 30TH DAY OF SEPTEMBER OF THE ASSESSMENT YEAR; ITA 4312/MUM/2009 MR. RAMESH R. SHAH 6 (B) IN THE CASE OF A PERSON OTHER THAN A COMPANY REFERRED TO IN THE FIRST PROVISO TO THIS SUB-SECTION THE 31ST DAY OF OCTOBER OF THE ASSESSMENT YEAR; (C) IN THE CASE OF ANY OTHER ASSESSEE THE 31ST D AY OF JULY OF THE ASSESSMENT YEAR. EXPLANATION 3.FOR THE PURPOSES OF THIS SUB-SECTION THE EXPRESSION TRAVEL TO ANY FOREIGN COUNTRY DOES NOT INCLUDE TRAVEL TO THE NEIGHBOURING COUNTRIES OR TO SUCH PLA CES OF PILGRIMAGE AS THE BOARD MAY SPECIFY IN THIS BEHALF BY NOTIFICATION IN THE OFFICIAL GAZETTE. (1A) . (1B) (3) IF ANY PERSON WHO [***] HAS SUSTAINED A LOSS IN ANY PREVIOUS YEAR UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PR OFESSION OR UNDER THE HEAD CAPITAL GAINS AND CLAIMS THAT THE LOSS O R ANY PART THEREOF SHOULD BE CARRIED FORWARD UNDER SUB-SEC.(1) OF SEC. 72 OR SUB-SEC.(2) OF SEC.73 OR SUB-SEC.(1) OR SUB-SEC.(3) OF SEC.74 OR SUB-SEC.(3) OF SEC.74A] HE MAY FURNISH WITHIN THE TIME ALLOWED UNDER SUB-S EC.(1) [***] A RETURN OF LOSS IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND CONTAINING SUCH OTHER PARTICULARS AS MAY BE PRESCRI BED AND ALL THE PROVISIONS OF THIS ACT SHALL APPLY AS IF IT WERE A RETURN UNDER SUB-SEC.(1). (4) ANY PERSON WHO HAS NOT FURNISHED A RETURN WITHI N THE TIME ALLOWED TO HIM UNDER SUB-SEC.(1) OR WITHIN THE TIME ALLOWE D UNDER A NOTICE ISSUED UNDER SUB-SEC.(1) OF SEC.142 MAY FURNISH TH E RETURN FOR ANY PREVIOUS YEAR AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETI ON OF THE ASSESSMENT WHICHEVER IS EARLIER : PROVIDED THAT WHERE THE RETURN RELATES TO A PREVIOUS YEAR R ELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF AP RIL 1988 OR ANY EARLIER ASSESSMENT YEAR THE REFERENCE TO ONE YEAR AFORESAID SHALL BE CONSTRUED AS A REFERENCE TO TWO YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. (4A) . (4B) (4C) .. (4D) .. (5) IF ANY PERSON HAVING FURNISHED A RETURN UNDER SUB-SEC.(1) OR IN PURSUANCE OF A NOTICE ISSUED UNDER SUB-SEC.(1) OF S EC.142 DISCOVERS ANY OMISSION OR ANY WRONG STATEMENT THEREIN HE MAY FURNISH A REVISED RETURN AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FR OM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION O F THE ASSESSMENT WHICHEVER IS EARLIER : ITA 4312/MUM/2009 MR. RAMESH R. SHAH 7 PROVIDED THAT WHERE THE RETURN RELATES TO THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF AP RIL 1988 OR ANY EARLIER ASSESSMENT YEAR THE REFERENCE TO ONE YEAR AFORESAID SHALL BE CONSTRUED AS A REFERENCE TO TWO YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. . EXPLANATION 1.FOR THE PURPOSES OF THIS SUB-SECTION SPECIFIED DATE IN RELATION TO A RETURN FOR AN AS SESSMENT YEAR MEANS (A) IN THE CASE OF EVERY ASSESSEE WHOSE TOTAL IN COME OR THE TOTAL INCOME OF ANY PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT INCLUDES ANY INCOME FROM BUSINESS OR PROFESSION THE DATE OF THE EXPIRY OF F OUR MONTHS FROM THE END OF THE PREVIOUS YEAR OR WHERE T HERE IS MORE THAN ONE PREVIOUS YEAR FROM THE END OF THE PR EVIOUS YEAR WHICH EXPIRED LAST BEFORE THE COMMENCEMENT OF THE ASSESSMENT YEAR OR THE 30TH DAY OF JUNE OF THE ASSESSMENT YEAR WHICHEVER IS LATER; (B) IN THE CASE OF EVERY OTHER ASSESSEE THE 30T H DAY OF JUNE OF THE ASSESSMENT YEAR.] EXPLANATION 2.WHERE IN RELATION TO AN ASSESSMENT YEAR AN ASSESSMENT IS MADE FOR THE FIRST TIME UNDER SEC. 147 THE ASSESSMENT SO MADE SHALL BE REGARDED AS A REGULAR ASSESSMENT FOR THE PURPOSES OF THIS SUB-SECTION.] (B) WHERE AS A RESULT OF AN ORDER UNDER SEC.147 OR SEC.154 OR SEC.155 OR SEC.250 OR SEC.254 OR SEC.260 OR SEC. 262 OR SEC.263 OR SEC.264 [OR AN ORDER OF THE SETTLEMENT COMMISSION UNDER SUB-SEC.(4) OF SEC.245D] THE AMOU NT OF TAX ON WHICH INTEREST WAS PAYABLE UNDER THIS SUB-SE C.HAS BEEN INCREASED OR REDUCED AS THE CASE MAY BE THE INTEREST SHALL BE INCREASED OR REDUCED ACCORDINGLY AND (I) IN A CASE WHERE THE INTEREST IS INCREASED T HE [ASSESSING] OFFICER SHALL SERVE ON THE ASSESSEE A NOTICE OF DEMAND IN THE PRESCRIBED FORM SPECIFYING THE SUM PA YABLE AND SUCH NOTICE OF DEMAND SHALL BE DEEMED TO BE A N OTICE UNDER SEC.156 AND THE PROVISIONS OF THIS ACT SHALL APPLY ACCORDINGLY; (II) IN A CASE WHERE THE INTEREST IS REDUCED TH E EXCESS INTEREST PAID IF ANY SHALL BE REFUNDED. (C) THE PROVISIONS OF THIS SUB-SEC. SHALL APPLY IN RESPECT OF THE ASSESSMENT FOR THE ASSESSMENT YEAR COMMENCING O N THE 1ST DAY OF APRIL 1988 OR ANY EARLIER ASSESSME NT YEAR AND REFERENCES THEREIN TO THE OTHER PROVISIONS OF T HIS ACT SHALL BE CONSTRUED AS REFERENCES TO THE SAID PROVIS IONS AS THEY WERE APPLICABLE TO THE RELEVANT ASSESSMENT YEA R.] (9) .. ITA 4312/MUM/2009 MR. RAMESH R. SHAH 8 8. THE A.O. HAS RESERVATION FOR TREATING THE REVIS ED RETURN FILED BY THE ASSESSEE AS VALID RETURN AS PER SEC.139(5) AS I N THE REVISED RETURN THE ASSESSEE CLAIMED THE LONG TERM CAPITAL LOSS AND TO GIVE BENEFIT OF CARRY FORWARD OF SAID LOSS. THE A.O. PLACED HIS RE LIANCE ON SUB-SEC.(3) TO SEC.139 WHICH IS ALREADY REPRODUCED HEREINABOVE AND ALSO SEC.80 OF THE ACT. WHICH READS AS UNDER:- NOTWITHSTANDING ANYTHING CONTAINED IN THIS CHAPTER NO LOSS WHICH HAS NOT BEEN DETERMINED IN PURSUANCE OF A RET URN FILED [IN ACCORDANCE WITH THE PROVISIONS OF SUB-SEC.(3) OF SE C.139] SHALL BE CARRIED FORWARD AND SET OFF UNDER SUB-SEC.(1) OF SE C.72 OR SUB- SEC.(2) OF SEC.73 OR SUB-SEC.(1) [OR SUB-SEC.(3)] O F SEC.74 [OR SUB- SEC.(3) OF SEC.74A]. 9. IN THE BACKGROUND OF THESE FACTS WE HAVE TO EXA MINE WHETHER THE ASSESSEE IS ENTITLED TO CLAIM OF THE CARRY FORW ARD OF THE LONG-TERM- CAPITAL LOSS AS PER THE REVISED RETURN FILED ON 28. 3.2006. WE HAVE ALREADY STATED THAT THE ORIGINAL RETURN WAS FILED B Y THE ASSESSEE IS WELL WITHIN THE TIME AND THERE IS NO CONTROVERSY ON THIS ASPECT. SUBSEQUENTLY THE ASSESSEE FILED THE REVISED RETURN AND CLAIMED THAT SAME IS FILED UNDER SUB-SEC.(5) TO SEC.139. AS PER THE PROVISIONS OF SEC.139(5) IF THE ASSESSEE HAS FURNISHED THE RETURN U/S.139(1) AND SUBSEQUENTLY DISCLOSES ANY WRONG STATEMENT THEREIN OR WHICH IN HIS OPINION IS WRONG THEN HE CAN REVISE THE RETURN AT A NY TIME BEFORE THE EXPIRY OF THE ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT WHICHEVER IS EARLIER. SO FAR AS THE TIME LIMIT PRESCRIBED UNDER SUB-SEC.(5) TO S EC.139 IS CONCERNED THE A.O. IS NOT DISPUTING THE SAME. ONLY ISSUE IS IN RESPECT OF INTERPRETATION OF SUB-SEC.(3) OF SEC.80. AS PER PR OVISIONS OF SUB-SEC.(3) OF SEC.139 IF THE ASSESSEE INCURRED LOSS IN ANY PR EVIOUS YEAR UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSIO N OR CAPITAL GAIN AND CLAIMS THAT THE SAID LOSS OR PART THEREOF SHOUL D BE CARRIED FORWARD UNDER SECTIONS 72 73 OR 74 ETC. THEN HE SHOULD FIL E THE SAID RETURN ITA 4312/MUM/2009 MR. RAMESH R. SHAH 9 WITHIN A TIME STIPULATED U/S.139(1) OF THE ACT. AS PER SEC.80 TO CLAIM THE CARRY FORWARD OF THE LOSS THERE ARE TWO CONDIT IONS:- (1) THE RETURN OF INCOME CLAIMING THE LOSS MUST BE FILED WITHIN THE TIME LIMIT PRESCRIBED U/S.139(3) R.W.S. 139(1) AND; (2) THE SAID LOSS MUST HAVE BEEN DETERMINED. 10. IN THE PRESENT CASE THE A.O. HAS SERIOUS RESER VATION FOR ALLOWING THE ASSESSEE TO CARRY FORWARD LONG-TERM-CA PITAL-LOSS BY INTERPRETING THE PROVISIONS OF SEC.80 READ WITH SEC .139(3). IN THIS BACKGROUND CAN IT BE SAID THAT THE ASSESSEE HAS NO T FULFILLED CONDITIONS LAID DOWN IN SEC. 80 AND HENCE IT IS N OT PERMISSIBLE TO ALLOW TO CARRY FORWARD OF THE CAPITAL LOSS. IN THE PRESENT CASE THE ASSESSE FILED ORIGINAL RETURN U/SEC.139(1) IN WHICH THE POSITIVE INCOME WAS DECLARED. EVEN AS PER THE ASSESSMENT ORDER POSI TIVE INCOME IS DETERMINED AS THE ASSESSEE COULD NOT SET OFF THE LO SS ON THE SALE OF THE SHARES OF PHOLX PHARMA LTD. IN THE YEAR ITSELF. HE CLAIMED THE SAME TO BE CARRY FORWARD. IN OUR HUMBLE OPINION CORRECT IN TERPRETATION OF SEC.80 AS PER THE LANGUAGE USED BY THE LEGISLATURE CONDITION FOR FILING REVISED RETURN OF LOSS UNDER SEC. 139(3) IS CONFINED TO THE CASES WHERE THERE IS ONLY A LOSS IN THE ORIGINAL RETURN F ILED BY THE ASSESSE AND NO POSITIVE INCOME AND ASSESSE DESIRES TO TAKE BENEFIT OF CARRY FORWARD OF SAID LOSS. ONCE ASSESSE DECLARES POSIT IVE INCOME IN ORIGINAL RETURN FILED UNDER SEC. 139(1) BUT SUBSEQU ENTLY FINDS SOME MISTAKE OR WRONG STATEMENT AND FILES REVISED RETURN DECLARING LOSS THEN CAN HE BE DEPRIVED OF THE BENEFIT OF CARRY FOR WARD OF SUCH LOSS? IN OUR HUMBLE OPINION IF WE ACCEPT INTERPRETATION GIVEN BY THE AUTHORITIES BELOW IT WOULD FRUSTRATE THE OBJECT O F SEC. 80. SEC. 80 IS A CAP ON THE RIGHT OF THE ASSESSE WHEN THE ASSESSEE CLAIMS THAT HE HAS NO TAXABLE INCOME BUT ONLY A LOSS BUT DOES NOT FILE THE RETURN OF INCOME DECLARING THE SAID LOSS AS PROVIDED IN SUB-S EC.(3) OF SEC.139. IT IS PERTINENT TO NOTE HERE THAT LEGISLATURE HAS DEAL T WITH TWO SPECIFIC SITUATIONS (I) U/S.139(1) IF THE ASSESSEE HAS A TA XABLE INCOME ITA 4312/MUM/2009 MR. RAMESH R. SHAH 10 CHARGEABLE TO TAX THEN IT IS A STATUTORY OBLIGATION TO FILE THE RETURN OF INCOME WITHIN THE TIME ALLOWED U/S.139(1). SO FAR AS SEC.139(3) IS CONCERNED IT ONLY PROVIDES FOR FILING THE RETURN O F LOSS IF THE ASSESSEE DESIRES THAT THE SAME SHOULD BE CARRIED FORWARD AND SET OFF IN FUTURE. AS PER THE LANGUAGE USED IN SUB-SEC.(3) TO SEC.139 IT IS CONTEMPLATED THAT WHEN THE ASSESSEE FILES THE ORIGINAL RETURN A T THAT TIME THERE SHOULD BE LOSS AND THE ASSESSEE DESIRES TO CLAIM SA ID LOSS TO BE CARRIED FORWARD AND SET OFF IN FUTURE ASSESSMENT YEARS. SU B-SEC.(1) OF SEC.139 CAST STATUTORY OBLIGATION ON THE ASSESSE WHEN THERE IS POSITIVE INCOME. IN THE PRESENT CASE ADMITTEDLY THE ASSESSEE FILED THE RETURN OF INCOME DECLARING THE POSITIVE INCOME AND EVEN IN THE REVIS ED RETURN THE ASSESSEE HAS DECLARED THE POSITIVE INCOME AS THE LO SS IN RESPECT OF THE SALE OF SHARES WHICH COULD NOT BE SET OFF INTER-S OURCE OR INTER-HEAD U/S.70 OR 71 OF THE ACT. 11. WE HAVE TO INTERPRET THE PROVISIONS OF ANY STAT UTE TO MAKE THE SAME WORKABLE TO THE LOGICAL ENDS. AS PER THE PROV ISIONS OF SUB-SEC.(5) TO SEC.139 IN BOTH THE SITUATIONS WHERE THE ASSESS EE HAS FILED THE RETURN OF POSITIVE INCOME AS WELL AS RETURN OF LOSS AT THE FIRST INSTANCE AS PER THE TIME LIMIT PRESCRIBED AND SUBSEQUENTLY FILES THE REVISED RETURN THEN THE REVISED RETURN IS TREATED AS VALID RETURN. IN THE PRESENT CASE AS THE ASSESSEE FILED ITS ORIGINAL RE TURN DECLARING THE POSITIVE INCOME AND HENCE IN OUR OPINION SUBSEQUE NT REVISED RETURN IS VALID RETURN ALSO AND THE ASSESSE IS ENTITLED TO CARRY FORWARD OF LONG-TERM CAPITAL LOSS. SUB-SECTIONS (1) AND (3) OF SEC.139 PROVIDES FOR THE DIFFERENT SITUATIONS AND IN OUR OPINION TH ERE IS NO CONFLICT IN APPLICABILITY OF BOTH THE PROVISIONS AS BOTH THE PR OVISIONS ARE APPLICABLE IN THE DIFFERENT SITUATIONS. WE ARE TH EREFORE OF THE OPINION THAT THERE IS NO JUSTIFICATION TO DENY THE ASSESSEE TO CARRY FORWARD THE LOSS. WE ACCORDINGLY DIRECT THE A.O. TO ALLOW TH E ASSESSEE TO CARRY FORWARD THE LOSS. 12. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ITA 4312/MUM/2009 MR. RAMESH R. SHAH 11 ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 9TH JULY 2011. SD/- SD/- ( R.S. SYAL ) ACCOUNTANT MEMBER ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI DATE : 29TH JULY 2011 FIT FOR PUBLICATION AM JM ITA 4312/MUM/2009 MR. RAMESH R. SHAH 12 ITA 4312/MUM/2009 MR. RAMESH R. SHAH 13 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)XX MUMBAI. 4) THE CIT-20 MUMBAI. 5) THE D.R. D BENCH MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T. MUMBAI *CHAVAN ITA 4312/MUM/2009 MR. RAMESH R. SHAH 14 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 15.07.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 18.07.2011 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER