ARUS PROPERTIES LLP,KOLKATA V. D.C.I.T., EXEMPT - 1, CIRCLE - 1(1), KOLKATA

ITA 533/KOL/2025

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Arus Properties LLP appealed against the decision of the Additional/Joint Commissioner of Income Tax (Appeals)-1, Mumbai, which denied the carry forward of business losses due to the late filing of the income tax return. The assessee argued that the return was filed by the due date applicable to LLPs under the LLP Act, 2008, specifically by September 30, 2023, rather than the July 31 date considered by the revenue authorities. The Tribunal examined the provisions of the LLP Act and the Income Tax Act, particularly sections 71 and 72, which govern the carry forward of business losses. The Tribunal concluded that the assessee's interpretation of the due date was correct and that the return was filed in a timely manner, thus entitling the assessee to carry forward the business losses.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 781968 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2023-2024
• Appeal Filed On: 17-03-2025
• Laws Referred To: Income Tax Act, 1961, LLP Act, 2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside

Judgement Text

" ITA No. 533/KOL/2025 (A.Y. 2023-2024) Arus Properties LLP 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘A’ BENCH, KOLKATA Before Shri Duvvuru RL Reddy, Vice-President (KZ) & Shri Rajesh Kumar, Accountant Member I.T.A. No. 533/KOL/2025 Assessment Year: 2023-2024 Arus Properties LLP,………………………..….…Appellant 7B, Pretoria Street, ‘Alom House’, Kolkata-700071 [PAN:ABCFA4787H] -Vs.- Deputy Commissioner of Income Tax,..…….Respondent Exempt-1, Circle-1(1), Kolkata, 10B, Middleton Row, Kolkata-700071 Appearances by: Shri P.J. Bhide, FCA, appeared on behalf of the assessee Ms. Archana Gupta, Addl. CIT, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing: August 06, 2025 Date of pronouncing the order: October 31, 2025 O R D E R Per Duvvuru RL Reddy, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Additional /Joint Commissioner of Income Tax (Appeals)-1, Mumbai dated 27th January, 2025 passed for assessment year 2023-24. Printed from counselvise.com ITA No. 533/KOL/2025 (A.Y. 2023-2024) Arus Properties LLP 2 2. Brief facts of the case are that the appellant-assessee is a Limited Liability Partnership. As per the LLP Act, 2008, the appellant maintains regular books of account and same are also audited. For the Financial Year ended 31.03.2023, the Appellant’s turnover aggregated to Rs.9,52,66,229/- which was below Rs.10 Crores, the limit prescribed for Tax Audit. However, the Appellant being LLP was governed by the LLP Act, whereunder the Appellant had to get its accounts audited within six months from the accounting year i.e. in the present case, 30.09.23. The due date of filing the Return was, therefore, in the case of the Appellant, 30.09.23. The Appellant submitted its Return declaring income under the head Other Sources Rs.7,06,395/- and loss under the head Business Rs.57,90,832/-. The net loss suffered by the Appellant worked out to Rs.50,84,437/-. The assessee claimed current year carry forward loss in terms of provisions of section 71 & 72 of the Income Tax Act, 1961. The Return was processed by CPC Bengaluru which held that the above loss, which the Appellant was not entitled to carry forward as the Return was filed beyond the due date which according to CPC, was 31.07.23. The Appellant is aggrieved by the above action of CPC in not allowing to carry forward of the aforesaid Business Loss. 3. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals). The ld. Addl./JCIT(Appeals) dismissed the appeal of the assessee saying that carry forward of current year business loss is not permissible if return of income is not filed within the due date. The assessee has not filed its return of income within the due date. Printed from counselvise.com ITA No. 533/KOL/2025 (A.Y. 2023-2024) Arus Properties LLP 3 4. On being aggrieved, the assessee preferred an appeal before the ITAT. 5. At the outset, it was the submission of the ld. Counsel for the assessee that the appellant was entitled to carry forward and set off against future profits in accordance with the provisions of sections 71 & 72 of the Income Tax Act, 1961. The revenue authorities held that the appellant was not entitled to carry forward as the return was filed beyond the due date which according to CPC was 31st July, 2023. Ld. Counsel further submitted that the CPC was wrong in not allowing the claim of assessee for carry forward of the business loss of Rs.57,90,832/- for set off against future profits in accordance with law and ld. Addl./JCIT(Appeals) dismissed the appeal of the assessee without going into merit of the case by simply upholding the order of ld. Assessing Officer. He, therefore, pleaded to set aside the orders of revenue authorities. 6. On the other hand, it was the submission of the ld. Departmental Representative that as per section 71 and 73 of the Income Tax Act, 1961, carry forward of current year business loss is not permissible if return of income is not filed within due date. Therefore, he pleaded to confirm the orders of both the revenue authorities. 7. We have heard both the sides and perused the material available on record. It is an admitted fact that the assessee is a Printed from counselvise.com ITA No. 533/KOL/2025 (A.Y. 2023-2024) Arus Properties LLP 4 Limited Liability Partnership. As per the LLP Act, 2008, the appellant has to maintain regular books of account and it should be audited with the aggregated turnover of more than 10 crores. It is an admitted fact that the assessee’s turnover aggregated to Rs.9,52,66,229/-. However, the appellant being LLP was governed by the LLP Act, had to get its books of account audited. The only grievance of the assessee is that the revenue authorities have not considered the due date for LLP according to Section 132(9) i.e. 30th September, but both the revenue authorities were under the impression that the due date of filing of the return of income was 31st July, 2023. Therefore, they said that the assessee-LLP is not entitled to carry forward and set off against future profits in accordance with the provisions of sections 71 & 72 of the Income Tax Act, 1961. It is also an undisputed fact that the assessee-LLP filed the return of income much prior to the due date of filing of the return, i.e. 30th September. Therefore, considering the facts and circumstances of the case, we are of the view that the assessee has filed the return of income much prior to the date of filing of the return of income under section 139(2) of the Act. Therefore, the assessee is entitled to carry forward and set off against the future profits in accordance with the provisions of section 71 & 72 of the Act. Accordingly, the grounds raised by the assessee are allowed. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 31/10/2025. Sd/- Sd/- (Rajesh Kumar) (Duvvuru RL Reddy) Accountant Member Vice-President Kolkata, the 31st day of October, 2025 Printed from counselvise.com ITA No. 533/KOL/2025 (A.Y. 2023-2024) Arus Properties LLP 5 Copies to :(1) Arus Properties LLP, 7B, Pretoria Street, ‘Alom House’, Kolkata-700071 (2) Deputy Commissioner of Income Tax, Exempt-1, Circle-1(1), Kolkata, 10B, Middl eton Row, Kolkata-700071 (3) Addl./JCIT(Appeals)-1, Mumbai; (4) CIT - ; (5) The Departmental Representative; (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S. Printed from counselvise.com "