Setoff of losses

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Aniket Shavdia (Querist)
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21 August 2012 Dear Sir/Madam,

I have a query in relation to Setoff of Losses.

An assessee has not claimed a business loss of Rs 50,000/- while filing return of income u/s 139(1) of Income Tax Act.

Scrutiny u/s 143(2) has been initiated.

Now during the assessment proccedings the assessee has discovered that it has skipped to claim loss of Rs 50,000/-.

Can the assessee get the benefit of such claim during the assessment proceedings?

srinath

srinath (Expert)
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21 August 2012 ya the assessee can claim losses during the assessment

CA Hardik Bunha

CA Hardik Bunha (Expert)
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21 August 2012 apsolutely no, the assessee can not claim for loss which has been skiped while filling retrun of income u/s 139(1).

once you declared your income under original return or IF REVISED then as per revised return then that will be final. then after you can not claim against A.O. if you claimed still it will not be suistainable

srinath

srinath (Expert)
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22 August 2012 It is a mistake made by the assessee in computing his total income at the time of filing the ROI.

It is obviously the duty of the AO to rectify the same during the course of assessment proceedings. Circular No. 14 (XL-35) dated 11th April 1955 also provides the same. As a precaution, the assessee can file a letter with AO highlighting the mistakes during the course of assessment proceedings.

With due respect, the SC in the case of Gotze is ridiculous basically. Even if it is treated as bible, the decision specifically says that nothing stops the appellate authorities from providing the relief to the assessee which are not claimed in the ROI.

You may also refer to the following judgement of Hyderabad ITAT

https://taxguru.in/income-tax-case-laws/assessee-claim-setoff-claimed-return-income-assessment-proceeding.html

There are other cases also supporting this. Nowhere under the Act, it is prohibited

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