M.A. Bakshi, Vice President - (1.) WE find it convenient to dispose of these two appeals of the assessee for assessment years 1997-98 and 1999-2000 by this consolidated order.
(2.) The common issue involved in both the appeals is as to whether the Assessing Officer was justified in rectifying his earlier order passed under Section 143(3) for withdrawing the set off of brought forward long-term capital loss. We have heard the parties and perused the record. The relevant facts in this case are that the assessee had filed the return of income for assessment year 1996-97 declaring an income of Rs. 1,98,630/- on 24.12.1996. Capital loss of Rs. 2,41,759/- was also disclosed in the return of income. The said long term capital loss was not permissible to be set off against profits and gains of business and, therefore, the same was disclosed for the purpose of carry forward and set off in the subsequent assessment year. The Assessing Officer made assessment for assessment year 1996-9/ determining the income at Rs. 2,29,121/-. The long term capital loss was allowed to be carried forward. For assessment year 1997-98, the assessee filed return of income of Rs. 2,53,850/- on 13.2.1998. In this return, the assessee has also disclosed long term capital gain of Rs. 24,608/-. The said long term capital gain was set off against the brought forward long term capital loss of Rs. 2,41,759/-. The Assessing Officer while framing the assessment under Section 143(3) on 26.3.1999 allowed the set off of long term capital loss against the long term capital gain of Rs. 24,608/-. The balance capital loss of Rs. 2,17,151/- was allowed to be carried forward. There is no information available to us for assessment year 1998-99. However, for assessment year 1999-2000, the assessee had filed the return declaring an income for Rs. 2,88,890/- on 30.3.2000. The Assessing Officer has made a mention in the assessment order of assessee having claimed set off of long term capital loss of Rs. 2,17,151/- against the long term capital gain on sale of shares and the balance having been invested in construction of house property. Subsequently, the Assessing Officer realized that the assessee was not entitled to set off of un-absorbed long term capital loss relating to assessment year 1996-97 as the return of income for that assessment year had been filed beyond the period allowed under Section 139(1). Show cause notice was issued to the assessee and subsequently the Assessing Officer passed orders under Section 154 for assessment years 1997-98 and 1999-2000 with drawing the set off of long term capital loss wrongly allowed while passing the orders under Section 143(3) for the respective assessment years.
(3.) THE assessee appealed to the Commissioner of Income-tax (A) but without any success. Hence, these appeals before us.;