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2019 (2) TMI 1591 - BOMBAY HIGH COURTRectification of mistake u/s 154 - mistake being apparent from the record as per provisions of section 71 (2) - according to the A.O, during the period relevant to the A.Y. in question, the assessee had declared low tax capital gain - HELD THAT:- In the case of Commissioner of Income Tax Vs British Insulated Calender's Ltd. Reported [1993 (1) TMI 43 - BOMBAY HIGH COURT] in which it was held that under sub-section (1) of Section 71 of the Act the assessee has no option in setting off the business loss against the heads of other income as long as there was no capital gain during the year under consideration. The case of the assessee does not fall under sub-section (1) of Section 71 of the Act since the assessee had declared capital gain. Such a situation would be covered by subsection (2) of Section 71 Provision of Sub-Section 2 of Section 71 was somewhat different and the expression “or, if the assessee so desires, shall be set off only against his income, if any, assessable under any head of income other than 'capital gains' has since been deleted. Nevertheless, the question that would arise is, whether even in the unamended form sub-section (2) of Section 71 of the Act mandates the assessee to set off its business loss against the capital gains of the same year when this provision used an expression “may” as compared to the expression “shall” used in subsection (1). In the present case, we are not called upon to judge the correctness of interpretation of either the revenue or the assessee. Sufficient for us to come to the conclusion that the question was far from being clear. It was clearly debatable. In this position, the A.O., as per the settled law, could not have exercised the rectification powers.
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