Case Law Details
Mr. Faisal Abbas Vs. DCIT (ITAT Mumbai)- It is observed from the copy of return filed by the assessee for assessment year 2001-02 on 31-10-2001 that loss of Rs. 27,26,360/- under the head “Profits & gains of business or profession” was declared. The said return for the year was duly filed within the time allowed u/s.139(1). We are currently dealing with assessment year 2002- 03 in which the assessee has claimed set off of the brought forward business loss against the income for the current year. In our considered opinion, the authorities below were not justified in not granting the set off of the brought forward business loss for the reason that the requirement to file return within the time prescribed u/s. 139(1) is for carrying forward the loss. Once loss is determined in the return file u/s. 139(3), the assessee becomes eligible for set off against the income of the subsequent years irrespective of the fact whether the returns of such later years are filed u/s. 139(1) or not. Sec. 80 read with sec. 139(3) requires the submission of return for loss before the due date. There is no such requirement that the subsequent years, in which the set off is claimed, must also fulfil the requirement of furnishing the returns within the time required u/s.139(1).
It is further important to note that sec. 153A dealing with assessment in case of search provides for the issuance of notice to the assessee in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted. Sec. 153A(1)(a) clearly provides that “the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139”. From the prescription of sec. 153A, it is apparent that the return filed in response to notice u/s. 153A is treated as the return filed u/s. 139. If that is the position, we are unable to appreciate as to how the loss determined for the immediately preceding year will not be available to the assessee for the set off against the current year’s income declared in the return filed u/s.153A. The position is quite different in the case of assessment u/s. 153A. Under the substituted mode of assessment pursuant to search, the requirement is to assess or re-assess the “total income” in respect of each assessment year falling within such six assessment years as contrary to the determination of “undisclosed income” u/s. 158BC for the block period. There is no provision analogous to sec. 158BB (4) in section 153A etc.
IN THE INCOME TAX APPELLATE TRIBUNAL,
MUMBAI BENCH “F”,MUMBAI
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