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M/s Quadra Medical Services Pvt. Ltd. Versus ITO, Ward-12 (1) , Kolkata

2015 (11) TMI 268 - ITAT KOLKATA

Rectification of mistake - omission to disallow a sum towards loss on sale/exchange of fixed assets in the original assessment - Held that:- Notice issued u/s 154 of the Act clearly mentions the intention of the Learned AO by duly mentioning the mistake that had crept in the original assessment order towards omission to disallow the loss on sale of fixed assets to the tune of ₹ 10,27,456/-. Admittedly, the loss on sale of fixed assets is only a capital loss and cannot be construed as a los .....

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take sought to be rectified in the notice u/s 154 of the Act itself. We don't endorse the arguments of the Learned AR that when there is no computation under the head capital gains while determining the taxable income, the resultant capital loss cannot be set off against the business income. This is a glaring mistake committed by both assessee as well as by the Learned AO in original scrutiny assessment proceedings which was later rectified u/s 154 by the Learned AO and we hold that the action o .....

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r of assessment framed by the Learned AO u/s 154 of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'). 2. Shri.Dev Kr.Kothari, FCA, the Learned AR argued on behalf of the assessee and Shri.Md.Ghayasuddin, JCIT, the Learned Senior DR argued on behalf of the revenue. 3. The only issue to be decided in this appeal is as to whether the omission to disallow a sum of ₹ 10,2,7456/- towards loss on sale/exchange of fixed assets in the original assessment is a mistake apparent .....

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tation of income tax depreciation statement filed by the assessee. The Learned AO did not disturb the income tax depreciation figure claimed by the assessee. The assessee did not disallow the loss on sale of assets in the sum of ₹ 10,27,456/- voluntarily in the return of income. The Learned AO also omitted to disallow the same in the original scrutiny assessment proceedings u/s 143(3) of the Act. Later the Learned AO sought to rectify the said apparent mistake by issuance of notice u/s 154 .....

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confirming initiation of rectification proceeding and order passed by the AO u/s. 154 and confirming rectification, though the notice was very vague and there was no mistake apparent from records rectifiable u/s. 154 2. The appellant pray that the order passed u/s. 154 may be set aside and the order passed u/s. 143(3) may be restored.. 5. The Learned AR argued that there was no computation under the head "capital gains" in the computation of taxable income by the assessee and by the Le .....

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sued u/s 154 which is also placed on record in the paper book filed by the assessee is very vague and did not indicate the apparent mistake from record and accordingly placed reliance on the decision of the Hon'ble Supreme Court in the case of Addl CIT vs Shreyas Gramin Bank reported in 2012 (9) TMI 518 - Supreme Court in support of his contentions. 6. In response to this, the Learned DR vehemently supported the orders of the lower authorities and stated that the Learned AO had clearly state .....

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ing the mistake that had crept in the original assessment order towards omission to disallow the loss on sale of fixed assets to the tune of ₹ 10,27,456/-. Admittedly, the loss on sale of fixed assets is only a capital loss and cannot be construed as a loss incidental to the business as claimed by the Learned AR. Hence the said capital loss ought to have been disallowed in the computation of total income by the assessee voluntarily or by the Learned AO in the original scrutiny assessment p .....

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"Rectification of mistake - Notice u/s. 154- Held that;- The said notice is ytotally vague as AO has not even indicated as to on what basis he has allowed excess set-off-notice u/s. 148 issued squarely on the basis of notice under Section 154- both the notices set aside- in favour of assessee." Held/Order: "Heard learned counsel on both sides. We have gone through the Notice under Section 154 of the Income Tax Act, 1961 [ 'Act', for short]. We find that the said notice is .....

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