Set-off not claimed in return can be claimed during assessment

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IN THE ITAT HYDERABAD BENCH ‘A’

Smt. Girija Reddy

v.

Income-tax Officer

IT Appeal No. 297 (Hyd.) of 2012

SA No. 56 (Hyd.) of 2012

[Assessment year 2008-09]

May 25, 2012

Brief facts of the issue are that during the scrutiny proceedings, the assessee had filed a letter before the Assessing Officer claiming that she had incurred short term capital loss of Rs. 97,07,329 from her investments in SBI Mutual Funds during the year. Letters from SBI Fund Management P. Ltd. in this regard were also filed. Though the Assessing Officer noted that the claim was in order as per section 74 of the Act, he noted that such loss had not been claimed in the return of income. Accordingly, he held that in view of the decision of the Hon’ble Supreme Court in the case of Goetze (India) Ltd. v. CIT [2006] 284 ITR 323/57 Taxman 1, the assessee’s claim was not allowable. During the appellate proceedings, the representative of the assessee submitted that set off for the short term capital loss arising from investments in SBI Mutual Funds should have also been given. He averred that the decision of the Hon’ble Supreme Court in the case of Goetze (India) Ltd. (supra) was in a different context and not on the similar facts. In instant case, the Assessing Officer had proposed to tax the amount as capital gains, as against the assessee’s claim that the same is not taxable. Accordingly, having recorded the fact that the assessee otherwise qualified for such set off, the set off should not have been disallowed on the ground that the same was not claimed in the return of income. He maintained that the assessee was well within her right to make claims during the assessment proceedings and it does not amount to filing revised computation. In this regard he referred to the decision of the Hon’ble Ahmedabad ITAT in the case of Kisan Discretionary Family Trust v. Asstt. CIT [2008] 113 TTJ (Ahd.) 918, which was rendered after the decision of the Hon’ble Apex court in the case of Goetze India Ltd. (supra). He further claimed that even otherwise the said decision of the Hon’ble Supreme Court restricts itself only to the powers of the Assessing Officer and not of the CIT (appeals). As the ground was not considered by the CIT(A), the assessee is in appeal before us.