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2023 (6) TMI 1067 - AT - Income TaxAltogether new claim of capital losses in the revised return - Return filed within the due date prescribed u/s 139(5) but subsequent to the due date prescribed u/s 139(1) - whether the assessee is entitled to carry forward such capital losses claimed in the revised return? - Whether the loss claimed in the revised return meets requirement of S. 139(5)? - HELD THAT:- To be entitled to carry forward the business loss or capital loss, the assessee is required to file the return u/s 139(1) - Section 80 by a non obstante clause prohibits claim of carry forward of such losses unless determined u/s 139(3) - Section 139(3) in turn, makes the mandate of the law clear that the loss return must be filed within time limit permissible u/s 139(1) - The revision of return u/s 139(5) is also circumscribed by expression discovers any omission or any wrong statement in the original return. In the instant case, the original return filed u/s 139(1) does not make reference to existence of any capital loss at all. The loss has been claimed for the first time in the revised ROI beyond the time limit prescribed under S. 139(1) - provision of S. 80 thus comes into play. The law codified thus is plain and concrete and does not admit of any ambiguity. The revenue authorities, in our view, have thus rightly held that the capital loss claimed beyond the time limit u/s 139(1) thus can not be carried forward u/s 74 of the Act in the factual matrix. We do not find any reason to think differently. In the instant case, an altogether fresh claim of capital loss has been made in the revised return filed beyond 139(1) time limit. It is not a case of mere correction or modification in the existing claim of capital loss. The capital loss claimed when seen qua revised return filed under s. 139(5), the claim of carry forward thereof, clearly does not pass the muster of law. No error in the action of the revenue in denial of carry-forward of capital losses claimed in the revised return. Whether Section 139(5) permits an assessee to file a revised return only if he discovers any omission or any wrong statement in the original return filed by him? - How and where the accounting entries in this regard has been made in the financial statement is totally unknown. How an inadvertent omission to account for such whopping losses has resulted, is not answered despite specific opportunity. The propriety of such capital loss itself is thus under cloud. It is quite difficult to affirm that the omission or wrongful statement in the original return towards such colossal loss is sheer inadvertence and not deliberate or willful. Such claim of loss in the revised return without showing inadvertence even at the stage of second appeal thus has been rightly denied. A reference to case of Kumar Jagdish Chandra Sinha[1996 (4) TMI 5 - SUPREME COURT] is quite apt to the facts of the case where was held that revised return can not be filed to cover up deliberate omission etc. in the original return. Thus, from this perspective also, phraseology of S. 139(5) does not permit claim of capital loss by way of a revised return. The claim of the Assessee towards incurring impugned capital loss and carry-forward thereof fails on this count too. Assessee has failed to furnish any explanation whatsoever on the nature and character of transactions resulting in such capital loss. An unsubstantiated and uncorroborated claim is thus, in any case, untenable in law. Hence, on this score too, the claim does not meet the ingredients of provisions of S. 139(5) of the Act. Appeal of the assessee dismissed. Disallowance of interest/financial charges - As per AO cash flow statement furnished by the assessee proves that interest expenses were incurred for the loans taken by it which was utilized for making investment in shares of NDTV Ltd. and hence it has nothing to do with the earning of interest income which was earned subsequently on fixed deposits made out of sale proceeds by a part of investment in shares - HELD THAT:- The interest income has arisen independently out of fixed deposits fixed with bank, the source of which in turn is sale of investments. The interest expenditure on the other hand has been incurred on borrowers utilized for investment in acquisition of shares of NDTV Ltd. Thus, apparently the assessee has failed to discharge the onus which lays upon it to show that incurring of expenditure has resulted in corresponding income taxable under the head ‘income from other sources’. In the absence of any live nexus between the expenditure and the corresponding income, the Revenue Authorities have rightly disallowed the claim of interest expenses having regard to the narrower scope of deductions eligible u/s 57(iii) - We thus decline to interfere with the action of the Assessing Officer and the First Appellate Authority.
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