DCIT Vs Bilcare Limited (ITAT Pune)
ITAT Pune held that omission of claiming long term capital loss at the time of filing of original return was not bona fide. Accordingly, rejection of claim of the same in revised return unsustainable in the eyes of law.
Facts- The assessee is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of manufacturing Pharmaceutical Packages and providing research-driven packaging solutions and clinical supplies services to leading pharmaceutical companies.
The assessee contested the disallowance of allowability of long term capital loss arising on sale of shares of BSPL of Rs. 922 crores.
Notably, the claim of long term capital loss was made via revised return. The Joint Commissioner of Income Tax gave direction that loss on sale of shares of Rs. 922 crores claimed in the revised return should not be entertained.
Conclusion- In the present case, the circumstances, which led the assessee company not to claim the long term capital loss in the original return of income were explained before the Assessing Officer, such explanation remains uncontroverted. Therefore, it cannot be said that it is not a bona-fide omission made in the original return of income. Therefore, it cannot be said that the assessee company had failed to satisfy the conditions prescribed under the provisions of sub-section (5) of section 139 of the I.T. Act for filing the revised return of income. Therefore, we hold that the Assessing Officer was not justified in not accepting the revised return of income as filed by the assessee company. It is a settled position of law that an assessee is entitled to revise return of income within the time allowed under the provisions of sub-section (5) of section 139 of the Act, once a revised return of income is filed, the natural consequence is that the original return of income is effaced or obliterated for all the purposes, it is not open to the Assessing Officer to advert to the original return of income.
Held that the assessee company had discovered, omitted to claim a genuine loss arising on sale of shares and, therefore, filed a revised return of income u/s 139(5) within the prescribed time limit claiming the determination and carry forward losses. It is a valid revised return of income filed u/s 139(5) of the Act. Therefore, the findings of the Assessing Officer as well as the ld. CIT(A) to the extent that the revised return of income is not valid one are reversed.
Thus, this reasoning of the AO that loss not claimed in the original return of income, but claimed in the revised return of income cannot be allowed, cannot be sustained in the eyes of law.
FULL TEXT OF THE ORDER OF ITAT PUNE
These are the cross appeals filed by the Revenue as well as by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)-13, Pune [„the CIT(A)‟] dated 31.03.2021 for the assessment year 2016-17. The Cross Objection filed by the assessee company against the appeal of the Revenue.
2. Briefly, the facts of the case are as under:
The assessee is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of manufacturing of Pharmaceutical Packages and providing research-driven packaging solutions and clinical supplies services to leading pharmaceutical companies. The Return of Income for the assessment year 2016-17 was filed on 28.11.2016 declaring a loss of Rs.45,98,46,394/-. The same was revised on 29.03.20218 declaring total loss of Rs.968,30,88,739/-. The said return of income was selected for scrutiny assessment. The assessee company also reported the following international transactions in its Form No.3CEB :-
