Archive · 23 Jul 2026
ITAT Rules Revised ITR Can't Deny Capital Loss Carry-Forward
A person in Bengaluru filed his income tax return on time but later filed a revised return to report more capital gains.
The tax department said he couldn't carry forward his capital losses because the revised return was filed late.
The person argued that his original return was on time and the revised return just corrected mistakes.
The ITAT agreed with him and said he could still carry forward his capital losses.
The ITAT ruled that filing a revised return late doesn't mean you lose the right to carry forward losses if the original return was filed on time.
A taxpayer filed a revised ITR to disclose additional capital gains.
The original return was filed on time, but the revised return was filed late.
The tax department disallowed the carry-forward of the revised capital loss.
The ITAT ruled that the original timely filing qualifies for carry-forward benefits.
The ITAT directed the tax department to allow the carry forward of the recomputed capital loss.
- Who
- A Bengaluru-based taxpayer and the Income Tax Appellate Tribunal (ITAT), Bengaluru
- What
- The ITAT ruled that a revised income tax return cannot take away the benefit of carrying forward capital losses if the original return was filed on time.
- When
- The original return was filed on October 5, 2021, and the revised return on March 31, 2022.
- Where
- Bengaluru, India
- Why
- The taxpayer filed a revised return to disclose additional capital gains, but the tax department disallowed the carry-forward of the revised capital loss.
Taxpayer's Argument
Tax Department's Argument
Filing of Original Return
Taxpayer's Argument
The original return was filed within the due date, fulfilling the statutory condition for carrying forward capital losses.
Tax Department's Argument
The revised return was filed after the due date, which should disqualify the taxpayer from carrying forward losses.
Effect of Revised Return
Taxpayer's Argument
The revised return merely corrects omissions and substitutes the original return, not treated as a fresh return.
Tax Department's Argument
A return reporting losses must be filed within the due date to qualify for carry-forward benefits.
- Taxpayer's Original Filing Date
- October 5, 2021
- Original Taxable Income
- ₹1.31 crore
- Original Capital Loss Claimed
- ₹5.26 lakh
- Revised Return Filing Date
- March 31, 2022
- Additional Short-Term Capital Gains
- ₹4.63 lakh
- Additional Long-Term Capital Gains
- ₹2.26 lakh
- Revised Capital Loss for Carry-Forward
- ₹2.99 lakh
- ITAT's Decision
- Allowed carry forward of the recomputed long-term capital loss of ₹2,99,750