TMI Blog2018 (2) TMI 1336X X X X Extracts X X X X X X X X Extracts X X X X ..... anshi V.Shah (2014 (7) TMI 98 - GUJARAT HIGH COURT) has held that the admission of appeal is under S.260A per se is inconsequential for determination of imposition of penalty. As we notice that the action of the assessee prima-facie lacks bonafide both on facts as well as on law, the consequences of penalty is inescapable. Therefore, we do not find any error in the conclusion drawn by the CIT(A) On the other aspect namely bonafides of claim of carried forward LTCLs purportedly arose in AY 2006-07 mitigating circumstances exists to prove the bonafides for possibility of carry forward of claim of capital losses under s.80 in the light of the fact that the assessee is assessable entity as an AOP. In the given circumstances, we do not see any culpability or impropriety in claiming set off of carry forward loss claimed as per return of income filed within the extended due date under s.139(1) of the Act. Hence, the plea raised on behalf of the assessee for cancellation of penalty on this issue is quite plausible. The assessee has shown the LTCL in the ROI and also apprised the AO at the time of assessee. Thus, notwithstanding the fact that Capital Loss does not appear in the statut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owards wrongful claim of adjustment towards brought forward Long Term Capital Losses as well as wrongful deduction claimed under s.54 of the Act. The CIT(A) in first appeal endorsed the aforesaid action of imposition of penalty vide its order dated 20/09/2013. 3. Aggrieved by the imposition of penalty and confirmation thereof by the first appellate authority, the assessee is in appeal before the Tribunal. 4. The Ld.Senior Counsel for the assessee Mr.S.N.Soparkar submitted that the penalty has been imposed on two aspects; namely (i) disallowance of deduction under s.54 of the Act amounting to ₹ 36,85,222/- and (ii) disallowance of set off of brought forward long term capital losses of ₹ 55,91,510/-. Addressing the second aspect of disallowance of set off of brought forward capital losses first, the Ld.Counsel submitted that the aforesaid loss arose in the AY 2006-07, the return for which was filed on 31/10/2006. The return was subjected to scrutiny assessment under s.143(3) of the Act. The aspect towards loss was brought on record by the assessee vide its submission dated 19/11/2008 relevant to AY 2006-07 before then AO. It was submitted that assessee specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n quantum proceedings that the assessee is assessed in the status of AOP and therefore as a corollary does not fall in the category specified under s.54 of the Act. The Ld.DR accordingly submitted that the deduction claimed by the assessee under s.54 of the Act runs counter to the very scheme of section 54 of the Act. Therefore, penalty was fully justified for such a palpably wrong claim. 7. As regards second aspect of the matter, namely set off of carried forward of capital losses the Ld.DR submitted that the Coordinate Bench has denied the aforesaid deduction inter alia on a clear reasoning that no such capital loss was declared in the return of income filed by the assessee. The Ld.DR further referred to the assessment order and submitted that neither the claim of LTCLs was included in the return of income for AY 2006-07 where the claim is purportedly originated nor the return was filed within the stipulated time period under s.139(1) of the Act and therefore the impugned capital loss was at any rate, not eligible for carried forward and set off in subsequent assessment year. Under these circumstances, it was claimed that such set off of LTCL was clearly contrary to the statut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or return filed relevant AY 2007- 08. Needless to say, determination of status of an assessee is a part of process of computation of income and assessment. This clearly goes to show without any need for interpretation that the assessee was not susceptible to tax at par with individual. Therefore, we fail to find legitimacy of any sort in the claim of deduction under s.54 of the Act. The deduction under s.54 is entity specific and available only to individual and HUF. The assessee herein has declared its status as AOP and conducted itself in this manner. Hence, the deduction claimed was prima-facie contrary to abundantly clear statutory provision of s.54 of the Act. A spurious plea is sought to be tailored to support a wholly unjustified claim which is found to be untrue and misleading as a matter of fact. The deduction claimed under s.54 of the Act was prima-facie contrary to the statutory provision. 9. The decisions relied upon on behalf of the assessee to give the status of the assessee a colour of individual are totally dissimilar in facts. In Deepak Family Trust 211 ITR 575 (Guj.) relied upon by the assessee, the trustees of the discretionary trust were assessed as individua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the consequences of penalty is inescapable. Therefore, we do not find any error in the conclusion drawn by the CIT(A). Consequently, we decline to interfere therewith. 12. We shall now turn to the other aspect namely bonafides of claim of carried forward LTCLs purportedly arose in AY 2006-07. It is the case of the assessee that Long Term Capital Loss was claimed in the return of income for AY 2006-07 by way of computation of income. This fact was also brought to the notice of the AO in the course of scrutiny proceedings. However, the AO has declined to allow the carry forward of the capital loss mainly on the ground that (i) the return of income was not filed under s.139(1) and (ii) the loss was not shown as part of the return of income. It is claimed on behalf of the assessee that the due date for filing the return of income for AY 2006-07 was extended from 31/07/2006 to 31/10/2006 vide order of the CBDT dated 24/02/2006 under s.119(2)(b) of the Act. The return of income for the relevant assessment year filed on 30/10/2006 is therefore within extended due date prescribed under s.139(1) of the Act. In this regard, we note that the extension has been granted by the CBDT in the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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