Balachandra Joshi Vs ACIT (ITAT Bangalore)
The appeal arose from the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi, which had partly allowed the assessee’s appeal against the CPC’s order passed under Section 143(1) of the Income Tax Act, 1961 for AY 2021–22. The principal issue before the ITAT was the denial of carry forward of capital loss amounting to ₹2,99,750 despite the original return having been filed within the due date prescribed under Section 139(1).
The assessee filed the original return of income on 5 October 2021 declaring taxable income of ₹1,31,76,320 and carrying forward capital loss of ₹5,26,428. A revised return was filed on 31 March 2022 under Section 139(5), reporting additional short-term capital gain of ₹4,63,989, long-term capital gain of ₹2,26,678, payment of additional self-assessment tax, and long-term capital loss of ₹2,99,750. While processing the revised return under Section 143(1)(a), the CPC denied the carry forward of the current year’s capital loss of ₹2,99,750. The CPC also denied foreign tax credit of ₹39,044. The CIT(A) directed the Assessing Officer to verify Form No. 66 and grant foreign tax credit in accordance with law but upheld the denial of carry forward of loss on the ground that a loss return must be furnished within the time allowed under Section 139(1).
