BALAGERIA CENTRAL CO-OPERATIVE LTD.,PURBA MEDINIPUR V. ACIT CIRCLE-27(1), HALDIA

ITA 2320/KOL/2024

AI Insights

The case involves Balageria Central Cooperative Ltd, the appellant, contesting an order from the CIT(A), National Faceless Appeal Centre, Delhi, regarding the assessment year 2018-2019. The primary issue was the non-consideration of the set off of interest income from an income tax refund against the carried forward depreciation loss by the Assessing Officer. The appellant argued that the interest income, assessed under 'income from other sources', should be set off against the carried forward depreciation loss as per Section 72(3) of the Income Tax Act. The Tribunal agreed with the appellant, directing the Assessing Officer to allow the set off.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 707268 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Appeal Filed On: 19-11-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRINMAY BASAK
• Assessee Lawyers: SOUMITRA CHOUDHURY
• Keywords: Depreciation; Rectification of order

Judgement Text

" आयकर अपीलीय अधिकरण, “एस.एम.सी” न्यायपीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH KOLKATA श्री जाजज माथन, न्याययक सदस्य क े समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER आयकर अपील सं/ITA No.2320/KOL/2024 (नििाारण वर्ा / Assessment Year :2018-2019) Balageria Central Cooperative Ltd Saraswatitala, Contai, HO, Contai Dist: Purba Medinipur, W.B. Vs ACIT, Circle-27(1), Haldia PAN No. :AAALB 0087 A (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) नििााररती की ओर से /Assessee by : Shri Soumitra Choudhury, Advocate राजस्व की ओर से /Revenue by : Shri Mrinmay Basak, Sr.DR सुनवाई की तारीख / Date of Hearing : 08/07/2025 घोषणा की तारीख/Date of Pronouncement : 08/07/2025 आदेश / O R D E R This is an appeal filed by the assessee against the order of the ld CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 26.09.2024, passed in DIN & Order No.ITBA/NFAC/S/250/2024-25/1069142040(1) for the assessment year 2018-2019. 2. Shri Soumitra Choudhury, ld.AR appeared on behalf of the assessee and Shri Mrinmay Basak, ld.Sr. DR appeared on behalf of the revenue. 3. It was submitted by the ld. AR that the original assessment came to be completed u/s.143(3) of the Act on 20.04.2021. It was the submission that the assessment was initiated for one of the grounds being the refund claim, most specifically, ratio of the refund claimed to the income of the assessee. It was the submission that the said assessment order passed u/s.143(3) of the Act was a subject matter of suo moto rectification by the ld. Assessing Officer. It was submitted by the ld. AR that in the rectification order the Assessing Officer mentions that the assessee has filed his ITA No.2320/KOL/2024 2 objections. Ld. AR drew my attention to pages 92 to 98 of the paper book, which are the copies of the objections filed and the same reads as follows:- ITA No.2320/KOL/2024 3 ITA No.2320/KOL/2024 4 ITA No.2320/KOL/2024 5 ITA No.2320/KOL/2024 6 ITA No.2320/KOL/2024 7 4. It was the submission that the issue relates to an interest on the I.T. Refund to an extent of Rs.30,59,290/-. The assessee had carried forward business loss of Rs.6,39,44,308/- and carried forward depreciation loss of Rs.1,24,37,142/-. It was the submission that admittedly the interest on the income tax refund is liable to be assessed only under the head income from other sources. There is no dispute that in regard to set off against the carried forward loss, admittedly the same cannot be set off against the carried forward business loss but the assessee is fully entitled to set off the said interest income under the head income from other sources against the ITA No.2320/KOL/2024 8 carried forward depreciation loss as also the depreciation loss of current year. It was the submission that this was also brought to the attention of the AO in the reply filed to rectification u/s.154 of the Act proposed by the Assessing Officer that under the provision of Section 72(3) of the Act, the set off of the income under the head income from other sources is possible against the depreciation losses. It was the submission that the Assessing Officer did not consider the submission of the assessee and has denied the assessee the set off of income under the head income from other sources in respect of the interest on the refund against the carried forward depreciation loss and has made an addition of Rs.30,59,290/-. It was the submission that the Assessing Officer may be directed to grant the set off of the said interest income against the carried forward depreciation loss. 5. In reply, ld. Sr. DR submitted that he supported the orders of the ld. Assessing Officer and ld. CIT(A). It was the submission that the interest on the income tax refund which is assessed under the head income from other sources cannot be set off against the carried forward business loss. 6. I have considered the rival submissions. A perusal of the facts of the present case clearly shows that the assessee has categorically mentioned in the reply to the rectification notice that the interest income is liable to be set off against the carried forward depreciation loss as also the depreciation of the impugned assessment year. The Assessing Officer has not considered the submission of the assessee and has treated the interest income which has been assessed under the head income from other sources as income liable to be taxed and has not provided the set off ITA No.2320/KOL/2024 9 against the income carried forward of depreciation loss. This being so, in view of the provisions of Section 72(3) of the Act, the Assessing Officer is directed to grant the assessee benefit of set off of interest income against the carried forward depreciation loss. 7. In the result, appeal of the assessee is allowed. Order dictated and pronounced in the open court on 08/07/2025. Sd/- (जाजज माथन) (GEORGE MATHAN) न्यानयक सदस्य / JUDICIAL MEMBER कोलकाता Kolkata; ददनाांक Dated 08/07/2025 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : आदेशािुसार/ BY ORDER, (Assistant Registrar) Income Tax Appellate Tribunal, Kolkata 1. अपीलाथी / The Appellant- 2. प्रत्यथी / The Respondent- 3. आयकर आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कोलकाता / DR, ITAT, Kolkata 6. गार्ज फाईल / Guard file. सत्यापपत प्रयत //True Copy// "