Torrent Investments Ltd. Vs PCIT (ITAT Ahmedabad)
Section 263 Shot Down on CSR & Capital Loss, Upheld on 14A: Torrent Investments Gets Mixed Verdict
PCIT had invoked revisionary jurisdiction holding that the assessment order passed u/s 143(3) r.w.s. 144B was erroneous & prejudicial to the interest of Revenue on three issues, namely the claim of short term capital loss, the disallowance of expenses u/s 14A & the deduction u/s 80G claimed in respect of CSR expenditure.
On the issue of capital loss, PCIT alleged that Assessee wrongly treated a loss of Rs.1.59 crore on sale of shares of Puro Wellness Pvt. Ltd. as short term instead of long term. According to him, FIFO method required linking the sale to earlier purchases & therefore the loss was long term, not eligible to be set off against STCG.
Tribunal found that the PCIT had misread the date of sale as 01.08.2019 whereas in fact all the shares were sold on 28.11.2019. Assessee had correctly applied FIFO, & even if the date taken by the PCIT was assumed, the computation still yielded short term loss. Further, AO had verified the transactions during scrutiny. Hence, Tribunal held that the view taken by AO was correct & PCIT erred in treating the assessment as erroneous on this count.
