Shanti Prime Publication Pvt. Ltd.
Section 154 of Income Tax Act, 1961 – Rectification of mistake – There was no mistake apparent from the record in the original assessment order and the brought forward losses had correctly been set off against the speculative business income for the year under consideration.
Facts: Assessee went on appeal before Tribunal and raised the ground that CIT(A) failed to appreciate that there was no mistake in the assessment order passed by AO so as to warrant any rectification u/s 154 and CIT (A) has been guided by irrelevant considerations and misappreciation of facts on record, as also section 73 and the Explanation thereto read with the law enshrined in section 154 in as much as he has failed to appreciate that Dy. C.I.T. ignored, or had otherwise not considered the replies filed on record in response to the show cause notice u/s 154.
Held, that losses of earlier years were claimed by the assessee to be set off against the profit of the year under consideration for the reason that there was no change in the nature of the business of the assessee company. The set off of loss claimed by the assessee was allowed by the AO vide order passed u/s.143(3) in accordance with the Explanation to section 73 as per which, the business of the assessee company is deemed to be a speculative business. To reiterate, in the earlier two years, the business of the assessee was a speculative business. Ergo, the business of the assessee company in the year under consideration remains the same as that in the earlier two assessment years. Thus, there was no mistake apparent from the record in the original assessment order and the brought forward losses had correctly been set off against the speculative business income for the year under consideration – SURYA COMMERCIALS LTD. Vs. DEPTUY CIT [2020] 181 ITD 597 (ITAT-LUCKNOW)