Fresh claims of BFLA is being made in the rectification return is rejected

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A taxpayer's rectification return was rejected because the Income Tax Department deemed the claim for Brought Forward Long-Term Capital Loss (BFLA) as a 'fresh claim' rather than a mistake apparent from the records. The taxpayer had attempted to adjust a speculative loss and use BFLA against long-term capital gains. The department disallowed the speculative loss adjustment, leading to a higher taxable income and the rejection of the rectification. The advice given suggests either accepting the outcome or writing to the Jurisdictional Income Tax Officer (ITO) to allow the set-off, as computerised systems may not handle such adjustments automatically.

yashes gala

yashes gala (Querist)

18 August 2023 Dear Experts

For AY 2022-23 I had b/f LTC loss of 50000
In AY 2022-23, I had LTCG of Rs 14000 and Speculative loss of 2500
So erroneous, I Adjusted the same and took set off of LTCG of rs 11500, which was available for set off against b/f loss

Now ITDpt , disallowed Specualative loss adjustment of Rs 2500, so they took LTCG of 14000 , but allowed set off of Rs 11500 b/f Capital loss , since adding 2500 to my income

I filed rectification return , taking set off of rs 14000 ( as was available b/f LTC loss )

But Income tax dpt replied
Under Section 154 of Income Tax Act 1961, rectification application can be filed only tocorrect mistakes apparent from records. In this case, fresh claims of BFLA is being made inthe rectification application, which is not a mistake apparent from records. Hence yourrectification request cannot be entertained.

How to explain Department that set off could be taken to extent of available capital gain.In fact they should have allowed in 1431A , full set off as they were aware of B/f capital loss

Thanks & regards
Yashesh Gala

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

18 August 2023 That is the drawback of computerization. The program is design that way. Either accept the solution as the LTCG is allowed to be set off for 8 tears, or write to your Jurisdictional ITO to allow you the available set off against the CY LTCG.

Message likes : 1 times

yashes gala

yashes gala (Querist)

19 August 2023 Sir ,My taxable income attracts tax of 15000+ (I will get no rebate u/s 87) if I accept it .. Thank you so much sir

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

19 August 2023 That is bad luck, for additional income of just 2,500/- loosing rebate of Rs. 12,500/-
Try offline, direct approaching ITO.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

10 September 2024 Good Luck.