By C. N. Vaze, Shailesh Kamdar, Jagdish T. Punjabi, Bhadresh Doshi
Chartered Accountants
Revised return u/s.139(5) — When original return made u/s.139(1) declaring positive income, claim for carry forward of long-term capital loss made in revised return u/s.139(5) is allowable.
Facts:
The assessee had filed original return of income u/s.139(1) declaring total income of Rs.94.09 lakhs. Subsequently, the assessee filed a revised return claiming long-term capital loss of Rs.1.82 crore and the said loss was claimed to be carried forward u/s.74. The AO denied carry forward of such loss on the ground that as per section 80, loss not determined in return u/s.139(3) cannot be allowed to be carried forward and set off u/s.74. The learned CIT also confirmed the order of the AO observing that carry forward of loss returned for the first time in revised return of income is not eligible for carry forward to the next assessment year as per provisions of section 80.
Held:
In the present case, the assessee filed the original return u/s.139(1) in which the positive income is determined and subsequently even revised return filed declared positive income as the assessee could not set off the long-term capital loss on the sale of shares. He claimed the same to be carried forward.
As per the provisions of section 139(5) in both the situations where the assessee has filed the return of positive income as well as return of loss at the first instance as per the time-limit prescribed and subsequently, files the revised return then the revised return is treated as valid return. Hence once the assessee declares positive income in original return filed u/s.139(1), but subsequently finds some mistake or wrong statement and files revised return declaring loss, then he cannot be deprived of the benefit of carry forward of such loss.
