M/s Splendor Landbase Ltd., New Delhi V. ACIT, New Delhi

CO 215/DEL/2016

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3858 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 06-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 09-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: V K GARG; ANIL KR CHOPRA
• Keywords: Depreciation; Rectification of order; Search and seizure; Revised return; Unabsorbed depreciation
• Section: 143(3); 153A; 80IB; 139(5); 147; 132; 139; 32

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO. 2461 /DEL/201 6 A.Y. : 20 10 - 11 ASSISTANT COMMISSIONER OF INCOME, CENTRAL CIRCLE-3, NEW DELHI VS. M/S SPLENDOR LANDBASE LIMITED, F-38/2, SPLENDOR HOUSE, OKHLA INDUSTRIAL AREA, PHASE-II, NEW DELHI (PAN: AAECA3986E) (APPELLANT) (RESPONDENT) AND C.O. NO. 2 15 /DEL/201 6 IN I.T.A. NO. 2461/DEL/2016 A.Y. : 20 10 - 11 M/S SPLENDOR LANDBASE LIMITED, F-38/2, SPLENDOR HOUSE, OKHLA INDUSTRIAL AREA, PHASE-II, NEW DELHI (PAN: AAECA3986E) VS. ASSISTANT COMMISSIONER OF INCOME, CENTRAL CIRCLE- 3, NEW DELHI (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. S. S . RANA, CIT(DR) ASSESSEE BY : SH. ANIL KR. CHOPRA, ADV. & SH. V.K. GARG, ADV. ORDER PER H.S. SIDHU : JM THE REVENUE HAS FILED THIS APPEAL AND ASSESSEE HAS FILED THE CROSS OBJECTION AGAINST THE IMPUGNED ORDER DATED 19.2 .2016 2 PASSED BY THE LD. CIT(A)-23, NEW DELHI RELEVANT TO A SSESSMENT YEAR 2010-11. SINCE THE ISSUES INVOLVED IN THE REVENUE S APPEAL AS WELL AS IN THE ASSESSEES CROSS OBJECTION ARE INTER-CONNEC TED, HENCE, THE APPEAL AND CROSS OBJECTION WERE HEARD TOGETHER AND A RE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE. 2. THE GROUNDS RAISED IN THE REVENUES APPEAL READ A S UNDER:- 1. THE ORDER OF LD. CIT(A) IS NOT CORRECT IN LAW A ND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE L D. CIT(A) ERRED IN LAW IN ALLOWING THE UNABSORBED DEPR ECIATION OF RS. 40,35,877/- DISALLOWED BY AO ON ACCOUNT OF CA RRY FORWARD LOSS. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ANY / AL L THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEA RING OF THE APPEAL. 3. THE GROUND RAISED IN THE ASSESSEES CROSS OBJEC TION READ AS UNDER:- 1. THAT THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT ALLOWING CARRY FORWARD OF BUSINESS LOSS OF RS. 2,78,08,927/- CLAIMED BY APPELLANT PURSUANT TO ITS RETURN FILED U/S. 153A OF THE ACT. 3 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY AND IS ENGAGED IN THE BUSINESS OF REAL ESTATE DEVELOP MENT. ASSESSEE FILED ITS RETURN OF INCOME U/S 139 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT) FOR AY 2010-11 ON 29 .03.2011 CLAIMING CARRY FORWARD OF BUSINESS LOSS OF RS.3,31, 15,331/- (INCLUDING UNABSORBED DEPRECIATION OF RS 40,35,877/ -) AND SHOWING INCOME FROM OTHER SOURCES OF RS 12,70,527/-. THE SAI D BUSINESS LOSS AND UNABSORBED DEPRECIATION WAS NOT ALLOWED TO BE CAR RIED FORWARD IN AY 2010-11 IN THE ORIGINAL ASSESSMENT U/S 143(3) D ATED 11.3.2013.). INCOME WAS ASSESSED AT RS 12,70,527/- BEING INCOME FROM OTHER SOURCES. SUBSEQUENTLY PURSUANT TO SEARCH AND SEIZURE PROCEEDINGS AND IN COMPLIANCE OF NOTICE U/S 153A, RE TURN FILED ORIGINALLY U/S 139 WERE FILED U/S 153A FOR AY 2010- 11 DECLARING THE SAME INCOME/LOSS. IN AY 2010-11, ASSESSMENT WAS MADE U/S 153A R.W.S.143(3) VIDE ORDER DATED 31.03.2015 WHEREIN CA RRY FORWARD OF BUSINESS LOSS OF RS 3,31,15,331/- (INCLUDING UNABSO RBED DEPRECIATION OF RS 40,35,877/-) WAS NOT ALLOWED ON TH E GROUND THAT ASSESSMENT U/S 143(3) ALREADY DONE WHEREIN C/F FORWA RD OF THE LOSS WAS DISALLOWED AS RETURN FOR AY 2010-11 WAS FILED B ELATEDLY. ACCORDINGLY, ASSESSMENT U/S 153A IS DONE AT INCOME O F RS 12,70,,527/- SAME AS INCOME IN ORDER U/S 143(3). LA TER ON, THE OTHER SOURCE INCOME OF RS 12,70,527/- IN AY 2010-11 WAS ALLOWED 4 TO BE SET OFF AGAINST BUSINESS LOSS OF RS 3,31,15,331 /- IN RECTIFICATION ORDER U/S 154/153A DATED 08.05.2015 AND THE NET BUSINESS LOSS OF RS 3,18,44,804 (BUSINESS LOSS OF R S 2,78,08,927/- PLUS UNABSORBED DEPRECIATION OF RS 40,35,877/-) WAS NOT ALLOWED TO BE C/F. AGGRIEVED WITH THE ASSESSMENT ORDER, THE ASS ESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 19.2.2016 HAS OBSERVED THAT NON-ALLOWANCE OF CARRY FORWARD OF BUSINESS LOSS WAS RESTRICTED TO RS 2,78,08,927/- BEING BUSINESS LOSS (EXCLUDING DEPRECIATION). CARRY FORWARD OF DEPRECIA TION OF RS. 40,35,877 WAS ALLOWED AND PARTLY ALLOWED THE APPEA L OF THE ASSESSEE. AGAINST THE IMPUGNED ORDER, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL ON THE ISSUE OF CARRY FORWARD O F DEPRECIATION OF RS 40,35,877/- AND THE ASSESSEE HAS FILED CROSS OBJE CTIONS ON THE ISSUE OF NON-ALLOWANCE OF CARRY FORWARD OF BUSINESS LOSS OF RS 2,78,08,927/-. 5. LD. DR RELIED UPON THE ORDER OF THE AO AND REITERA TED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL OF THE RE VENUE. HE RELIED UPON THE DECISION OF HONBLE DELHI HIGH COUR T IN THE CASE OF CIT VS KABUL CHAWLA [2015] 380 ITR 573 (DELHI) AND ITAT KOLKATA DECISION IN THE CASE OF TANTIA CONSTRUCTIONS LTD VS D CIT 2016-TIOL- 2027-ITAT-KOL. 6. ON THE CONTRARY, THE LD. AR OF THE ASSESSEE HAS R ELIED UPON 5 THE ORDER OF THE LD. CIT(A) AS FAR AS ISSUE OF ALLOWA NCE OF C/F OF UNABSORBED DEPRECIATION IS CONCERNED, LD. AR HAS ALS O FILED SYNOPSIS ON 08.05.2018 ON THIS ISSUE. THE RELEVANT P ARAGRAPH OF THE SUBMISSIONS ARE REPRODUCED BELOW: SUBMISSIONS IN DEPARTMENTAL APPEAL IN AY 2010-11 RELATING TO C/F OF UNABSORBED DEPRECIATION. WITH REGARD TO THE ISSUE OF CLAIM OF CARRY FORWARD O F UNABSORBED DEPRECIATION U/S 32 OF RS 40,35,877/- IN 153A RETURN FOR AY 2010-11, IT IS SUBMITTED THAT AS UNABSORBED DEPRECIAT ION IS NOT A LOSS AS IT IS GOVERNED BY PROVISIONS OF SECTION 32(2 ), THE RESTRICTIVE PROVISIONS OF SECTION 80 DOES NOT APPLY TO SUCH UNABSORBED DEPRECIATION AS INTER ALIA HELD IN: (I) CIT VS. GOVIND NAGAR SUGAR LTD. 334 ITR 0013 (DELHI HC) (II) CIT VS. HARYANA HOTELS LTD 276 ITR 0521 (P&H HC) (III) BRAHAMAVAR CHEMICALS PVT. LTD. VS. CIT 239 ITR 867 (K AR HC).... WE QUOTE FROM HEADNOTE IN THE CASE OF CIT VS GOVIND NAGAR SUGAR LTD. [2011] 334 ITR 13 (DELHI HC) AS UNDER : HELD, DISMISSING THE APPEAL, THAT SECTION 80 AND 13 9(3) OF THE ACT APPLY TO BUSINESS LOSSES AND NOT TO UNABSORBED DEP RECIATION WHICH WAS EXCLUSIVELY GOVERNED BY THE PROVISIONS OF SECTION 6 32(2) OF THE ACT. THAT BEING SO, THE PERIOD OF LIMITAT ION FOR FILING LOSS RETURN AS PROVIDED UNDER SECTION 139(1) WOULD NOT BE APPLICABLE FOR CARRYING FORWARD OF UNABSORBED DEPRE CIATION AND INVESTMENT ALLOWANCE. UNDER SECTION 32(2) UNABSORBED DEPRECIATION OF A YEAR BECOMES PART OF DEPRECIATION OF SUBSEQUENT YEAR BY LEGAL FICTION AND WHEN IT BECOMES PART OF THE CURRENT YEAR DEPRECIATION IT WAS LIABLE TO BE SET OFF AGAINST ANY OTHER INCOME, IRRESPECTIVE OF WHETHER THE EARLIER YEA RS RETURN WAS FILED IN TIME OR NOT. ACCORDINGLY, THE LD. CIT(A) HAS CORRECTLY ALLOWED C/F OF SUCH UNABSORBED DEPRECIATION. REFER PARA 4.3.3 AT PG 4 O F CIT(A) ORDER OF AY 2010-11. IN VIEW OF THE ABOVE, THE DEPARTMENTAL APPEAL DESERVE S TO BE DISMISSED. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RE CORDS, ESPECIALLY THE IMPUGNED ORDER. WE FIND THAT LD.CIT (A) HAS ADJUDICATED THE ISSUES IN DISPUTE AS UNDER VIDE PARA 4.3.2 AND 4.3.3 AT PAGE 4 & 5 OF HIS IMPUGNED ORDER AS UNDER: 4.3.2 IN THIS CASE THE ORIGINAL RETURN OF INCOME WAS FILED ON 29.03.2011 DECLARING LOSS AT RS. (3,31,15,33/-) WHICH WAS ASSESSED U/S 143(3) OF 7 THE ACT VIDE ORDER DT. 11.03.2013. IN THIS ASSESSMENT ORDER THE BUSINESS LOSS WAS NOT ALLOWED TO BE CARRIED FORWARD SINCE THE RETURN OF INCOME WAS FILED BEYOND THE DUE DATE. NO APPEAL WAS FILED AGAINST THE ORDER. THEREAFTER, CONSEQUENT UPON SEARCH AND SEIZURE OPERATION CONDUCTED ON 22.03.2013 AND 23.03.2013 AGAINST THE ASSESSEE, REASSESSMENT U/S 153A R.W.S. 143(3) OF THE ACT WAS MADE ON 31.03.2015 AT THE SAME INCOME ASSESSED U/S 143(3) DT. 11.03.2013 BY DISALLOWING THE CARRY FORWARD OF LOSS ONCE AGAIN. SUBSEQUENTLY, AS MENTIONED ABOVE, THE REASSESSMENT ORDER WAS RECTIFIED ON 08.05.2015. ADMITTEDLY, NO FRESH ADDITION HAS BEEN MADE IN THE PRESENT REASSESSMENT UNDER CONSIDERATION. IN TERMS OF THE PROVISIONS OF S. 153A OF THE ACT THE AO WAS DUTY BOUND TO ISSUE NOTICE U/S 153A OF THE ACT AND MAKE REASSESSMENT BY CONSIDERING ANY NEW INCRIMINATING MATERIAL FOUND AS A RESULT OF THE CONNECTED SEARCH, AND SINCE THE AO DID NOT FIND ANY NEW INCRIMINATING MATERIAL SHE COMPLETED THE ASSESSMENT AT THE EARLIER ASSESSED INCOME. THE ACTION OF THE AO IS 8 ALSO IN CONSONANCE WITH THE ORDER OF THE HONBLE HIGH COURT OF DELHI IN KABUL CHAWLA (2015) 234 TAXMAN 300 (DEL). THUS, IN MY VIEW THERE IS NO GRIEVANCE WHICH NEED TO BE ADDRESSED IN THIS APPEAL, WHICH BEING INFRUCTUOUS IS DISMISSED. 4.3.3 HOWEVER, EVEN IN THIS ORDER THE CARR Y FORWARD OF LOSS OF RS. 3,18,44,804/- WAS NOT ALLOWED. THE APPELLANT HAS SUBMITTED THAT THIS REASSESSMENT WAS IN CONSEQUENCE OF RETURN FILED IN RESPONSE TO NOTICE U/S 153A, WHICH STATUTORILY BEING A RETURN U/S 139(1) PROVISIONS OF S. 80 OF T HE ACT DO NOT APPLY AND THE ASSESSEE IS ELIGIBLE TO CARRY FORWARD OF THE LOSS. I DO NOT AGREE WITH THE CONTENTIONS OF THE APPELLANT SINCE SUB-SECTION (3) OF S. 139 VERY SPECIFICALLY MENTIONS THAT THE RETURN IS TO BE FILED WITHIN THE TIME ALLOWED UNDER SUB- SECTION (1) OF S. 139, AND THE REFERENCE TO S. 139 IN CLAUSE (A) OF S. 153A(1) SIMPLY LAYS DOWN THE PROCEDURE FOR ASSESSMENT IN CASES WHERE RETURNS ARE FILED IN RESPONSE TO NOTICE U/S 153A, AND THEREFORE I AM NOT INCLINED TO ACCEPT THE ARGUMENT OF THE APPELLANT. HOWEVER, THE CLAIM OF THE 9 APPELLANT THAT THE UNABSORBED DEPRECIATION OF RS.40,35,877/- SHOULD BE ALLOWED TO BE CARRIED FORWARD SINCE IT IS NOT COVERED BY THE LIMITATION OF S. 80 OF THE ACT. THE CARRY FORWARD OF UNABSORBED DEPRECIATION IS GOVERNED BY SUB-SECTION (2) OF S. 3 2 OF THE ACT WHICH IS PLACED IN CHAPTER IV OF THE ACT ACCORDING TO WHICH THE TOTAL INCOME IS TO BE COMPUTED, WHILE S. 72 AND S. 80 ARE PART OF CHAPTER VI OF THE ACT. THE AO IS DIRECTED TO VERIFY THE CLAIM OF DEPRECIATION OF RS. 40,35,877/- AND ALLOW SET OFF IN THE NEXT / SUBSEQUENT YEAR(S). THIS GROUND IS THEREFORE PARTLY ALLOWED. 7.1 AS REGARDS THE ISSUE OF CARRY FORWARD OF DEPRECI ATION RAISED IN REVENUES APPEAL IS CONCERNED, WE FIND THAT LD. CIT( A) HAS OBSERVED THAT THE CLAIM OF THE ASSESSEE IS THAT THE UNAB SORBED DEPRECIATION OF RS. 40,35,877/- SHOULD BE ALLOWED T O BE CARRIED FORWARD SINCE IT IS NOT COVERED BY THE LIMITATION OF S . 80 OF THE ACT. HOWEVER, THE CARRY FORWARD OF UNABSORBED DEPRECIATI ON IS GOVERNED BY SUB-SECTION (2) OF S. 32 OF THE ACT WHICH IS PLA CED IN CHAPTER IV OF THE ACT ACCORDING TO WHICH THE TOTAL INCOME IS TO BE COMPUTED, WHILE S. 72 AND S.80 ARE PART OF CHAPTER-VI OF THE A CT. THEREFORE, LD. CIT(A) HAS RIGHTLY DIRECTED THE AO TO VERIFY THE CLAIM OF 10 DEPRECIATION OF RS 40,35,877/- AND ALLOW SET OFF IN THE NEXT/SUBSEQUENT YEARS, WHICH DOES NOT NEED ANY INTERF ERENCE ON OUR PART, HENCE, WE UPHOLD THE FINDING OF THE LD. CIT (A) ON THIS ISSUE AND ACCORDINGLY REJECT THE GROUNDS RAISED BY THE REVENUE. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED. ASSESSEES CROSS OBJECTION 8. APROPOS ISSUE OF CARRY FORWARD OF BUSINESS LOSS OF RS. 2,78,08,927/- RAISED IN THE ASSESSEES CROSS OB JECTION IS CONCERNED, AT THE TIME OF ARGUMENT IN THE CROSS OBJEC TION, LD. COUNSEL OF THE ASSESSEE HAS FILED THE FOLLOWING WRIT TEN SUBMISSION AND REITERATED THE CONTENTS THEREOF:- ASSESSES SUBMISSION IN CROSS OBJECTION 1. THE ISSUE INVOLVED IN CROSS OBJECTIONS OF APPELLANT I N AY 2010-11 RELATES TO CARRY FORWARD OF BUSINESS LOSS CLA IMED IN 153A RETURN. THE BUSINESS LOSS SUFFERED BY THE APPELL ANT IN AY 2010-11 AS CLAIMED IN 153A RETURN IS DULY ALLOWAB LE TO BE CARRIED FORWARD EVEN IF THE SAME WAS NOT ALLOWED TO B E CARRIED FORWARD IN ORIGINAL ASSESSMENT U/S 143(3) F OR AY 2010-11 ON ACCOUNT OF DELAYED FILING OF ORIGINAL RETU RN. IT IS APPELLANTS CASE THAT RETURN UNDER SECTION 153A IS DEE MED TO 11 BE RETURN UNDER SECTION 139(1) AND AS SUCH SECTION 80 DOES NOT APPLY. EXTRACT FROM SECTION 153A IS AS UNDER: (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148. SECTION 149, SECTION 151 AND SECTION 153, IN THE CASE OF A PERSON WHERE A SEARCH I S INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECT ION 132A AFTER THE 31 ST DAY OF MAY 2003, THE ASSESSING OFFICER SHALL 2. ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTIN G FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APP LY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139; 3. THE RETURN FILED U/S 153A DEEMED TO BE THE RETURN FI LED U/S 139(1). ACCORDINGLY, RESTRICTIVE PROVISIONS OF SECT ION 80 AS TO 12 CARRY FORWARD AND SET OFF OF LOSS DOES NOT APPLY. I N THIS REGARD, THE APPELLANT RELIES UPON THE RULING OF HON BLE PUNE ITAT IN THE CASE OF SANJAY NANDLAL VYAS VS ITO, (ITA T PUNE) ITA NO 771 TO 774/PN/2010 DATED 23.12.2011 WHICH DIRECTLY COVERS THE CASE OF THE APPELLANT. IN THE SAID CASE, T HE HONBLE ITAT HAS ALLOWED THE CARRY FORWARD OF INCREA SE IN BUSINESS LOSS CLAIMED IN 153A RETURN BY HOLDING THAT PROVISIONS OF SECTION 80 DOES NOT APPLY TO RETURN ACC EPTED & ASSESSED U/S 153A. THE ASSESSMENT UNDER SECTION 153A R.W.S. 143(3) OF THE ACT HAS BEEN FRAMED ON THE BASIS OF RE TURN FILED IN RESPONSE TO NOTICE ISSUED UNDER SECTION 153A AND I S ACCORDINGLY WITHIN PRESCRIBED TIME. RETURN UNDER 153A ON THE BASIS OF WHICH ASSESSMENT WAS FRAMED HAS REPLACED O RIGINAL RETURN SUPERSEDING EARLIER RETURN AND SUPERSEDING T HE ASSESSMENT BASED UPON THAT ORIGINAL RETURN. AS RETUR N UNDER SECTION 153A WAS ACCEPTED THEREUNDER, IT IS IN TIME A ND CARRY FORWARD OF LOSS IS ALLOWABLE BEING NOT HIT BY SECTION 80. 4. A RETURN FILED UNDER SECTION 153A TAKES THE PLACE OF TH E ORIGINAL RETURN UNDER SECTION 139, FOR THE PURPOSES O F ALL OTHER PROVISIONS OF THE ACT. ONCE THE A.O. ACCEPTS THE R EVISED RETURN FILED UNDER SECTION 153A, THE ORIGINAL RETURN UNDER SECTION 139 ABATES AND BECOMES NON-EST. IN THIS REGA RD, THE 13 APPELLANT RELIES UPON THE DECISION OF JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME -TAX-19 VS NEERAJ JINDAL [2017] 393 ITR 1 (DELHI). WE QUOTE FROM PARA 20 & 21 OF THE SAID CASE AS UNDER: 20. THEREFORE, THE POSITION THAT EMERGES FROM THE ABOVE-MENTIONED PROVISION IS THAT ONCE THE ASSESSEE FI LES A REVISED RETURN UNDER SECTION 153A, FOR ALL OTHER PROVISIONS OF THE ACT, THE REVISED RETURN WILL BE TRE ATED AS THE ORIGINAL RETURN FILED UNDER SECTION 139. ON SIMIL AR LINES, THE GUJARAT HIGH COURT IN THE CASE OF KIRIT DAHYABHAI PATEL V. ASSTT. CIT [2015] 280 CTR 216, H ELD THAT: 'IN VIEW OF SPECIFIC PROVISION OF S. 153A OF T HE I.T. ACT. THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER S. 153A OF THE I.T. ACT IS TO BE CONSIDERED AS RETURN FILED UNDER S. 139 OF THE ACT, AS THE AO HAS M ADE ASSESSMENT ON THE SAID RETURN AND THEREFORE, THE RETUR N IS TO BE CONSIDERED FOR THE PURPOSE OF PENALTY UNDER S. 271(1)(C) OF THE I.T. ACT AND THE PENALTY IS TO BE LEVI ED ON THE INCOME ASSESSED OVER AND ABOVE THE INCOME RETURNED UNDER S. 153A, IF ANY.' 21. THUS, IT IS CLEAR THAT WHEN THE A.O. HAS ACCEPTED THE REVISED RETURN FILED BY THE ASSESSEE UNDER SECTION 15 3A, 14 NO OCCASION ARISES TO REFER TO THE PREVIOUS RETURN FILED UNDER SECTION 139 OF THE ACT. FOR ALL PURPOSES, INCLU DING FOR THE PURPOSE OF LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT, THE RETURN THAT HAS TO BE LOOKE D AT IS THE ONE FILED UNDER SECTION 153A 5. IN THE CASE OF ACIT, CENTRAL CIRCLE -1(3), CHENNAI V S. V.N. DEVADOSS [2013] 32 TAXMANN.COM 133 (CHENNAI TRIB.) HONBLE ITAT CHENNAI BENCH HAS HELD THAT THE RETURNS FILED BY THE ASSESSEE UNDER SECTION 153A ARE TO BE TREATED AS RETURNS FILED UNDER SECTION 139(1) BY VIR TUE OF THE LAW STATED IN SECTION 153A(1)(A). WE QUOTE FROM T HE HEAD NOTES AS UNDER:- WHETHER A RETURN FILED IN PURSUANCE OF A NOTICE ISSUE D UNDER SECTION 153A IS AS GOOD AS A RETURN FILED UND ER SECTION 139 AND MORE PARTICULARLY UNDER SECTION 139(1 ) HELD, YES WHETHER DEDUCTION CLAIMED UNDER SECTION 8 0- IB(10) IN A RETURN FILED UNDER SECTION 153A CAN BE D ENIED ON GROUND THAT CLAIM WAS NOT MADE EARLIER IN A RETUR N FILED UNDER SECTION 139(1) HELD, NO [PARAS 26 TO 4 2] [IN FAVOUR OF ASSESSEE] THE RIDER PROVIDED UNDER LAW BY SECTION 80AC DOES N OT APPLY TO THE INSTANT CASE AND THE RETURNS FILED BY THE ASSES SEE 15 UNDER SECTION 153A HAVE BEEN CONSIDERED AS RETURNS FI LED UNDER SECTION 139(1) WITHIN TIME. AS PER SECTION 80A C, NO DEDUCTION UNDER SECTION 80IB SHALL BE ALLOWED UNLESS RETURN OF INCOME IS FURNISHED BEFORE DUE DATE UNDER SECTION 139(1). ACCORDINGLY, IT WAS HELD IN THIS CASE CLEARLY THAT RE TURN UNDER SECTION 153A IS AS GOOD AS A RETURN FILED UNDER SEC TION 139(1). 6. HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS B.G S HIRKE CONSTRUCTION TECHNOLOGY PVT LTD [2017] 79 TAXMANN.COM 306 (BOM) HELD THAT: A RETURN FILED U/S 153A IS A RETURN FURNISHED U/S 1 39 AND THEREFORE, PROVISIONS OF THE ACT WHICH APPLY TO RETURN FILED IN REGULAR COURSE U/S 139(1), WOULD ALSO CONTINUE T O APPLY IN CASE OF RETURN FILED U/S 153A. IN VIEW OF THE ABOVE AS THE APPELLANTS RETURN WAS FI LED AND ASSESSED UNDER SECTION 153A AND THIS RETURN IS TREAT ED AS A VALID RETURN FOR THE SAID ASSESSMENT UNDER SECTION 15 3A, IT IS A RETURN UNDER SECTION 139(1) FILED BY THE APPELLANT. ACCORDINGLY, THE PROVISIONS OF SECTION 80 DO NOT APPL Y TO THE APPELLANT AND THE APPELLANT IS ELIGIBLE FOR CARRY FOR WARD OF THE BUSINESS LOSS. 16 7. THE ORDER OF THE LD. CIT(A) NOT ALLOWING CARRY FORWA RD OF LOSS IN AY 2010-11 (CIT(A) ORDER PG 4, PARA 4.3) IS CLEARLY ERRONEOUS. CASE LAW CITED BY THE APPELLANT ARE NOT DIS CUSSED AND/OR REBUTTED. RELIANCE BY THE LD. CIT(A) ON THE DEC ISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS K ABUL CHAWLA [2015] 380 ITR 573 (DELHI) IS TOTAL OUT OF THE BOX AS THE SAME IS IN CONTEXT OF ADDITION IN SEARCH ASSESSME NT IN THE ABSENCE OF INCRIMINATING MATERIAL. DECISION IN KABUL CHAWLA DOES NOT DISCUSS AS TO WHETHER RETURN UNDER SECTION 153A IS DEEMED TO BE A RETURN UNDER SECTION 139(1) AND THAT ACCORDINGLY, IT IS NOT HIT BY SECTION 80. AS SEEN FROM THE ABOVE, THE CLAIM OF THE APPELLANT IS DULY COVERED BY DIRECT CASE LAWS OF HIGH COURTS AND TRIB UNAL IN FAVOR. AS SUCH, THE SAME DESERVES TO BE FOLLOWED IN APPELLANTS FAVOUR. IN VIEW OF THE ABOVE, IT IS PRAYED THAT THE ORDER OF THE LD. AO DISALLOWING THE CARRY FORWARD AND ORDER OF LD . CIT(A) SUSTAINING THE SAME DESERVES TO BE QUASHED. 8.1 LD. COUNSEL OF THE ASSESSEE VEHEMENTLY ARGUED THAT THE BUSINESS LOSS SUFFERED BY THE ASSESSEE IN AY 2010-11 AS CLAIMED IN 153A RETURN IS DULY ALLOWABLE TO BE CARRIED FORWARD AND SET OFF EVEN 17 IF THE SAME WAS NOT ALLOWED TO BE CARRIED FORWARD IN ORIGINAL ASSESSMENT U/S 143(3) FOR AY 2010-11 ON ACCOUNT OF DE LAYED FILING OF ORIGINAL RETURN. HE FURTHER STATED THAT IT IS ASSESS EES CASE THAT RETURN UNDER SECTION 153A IS DEEMED TO BE RETURN UNDER SECTION 139(1) AND AS SUCH PROVISIONS OF SECTION 80 DO NOT A PPLY. IN SUPPORT OF THIS CONTENTION, HE REITERATED THE CONTENTS OF THE AFO RESAID WRITTEN SUBMISSION AND RELIED UPON THE CASE LAWS CITE D THEREIN AND STATED THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE DECISION OF THE ITAT, PUNE BENCH IN THE CASE OF SANJAY NANDL AL VS. ITO (ITAT, PUNE) ITA NO. 771 TO 774/PN/2010 DATED 23.12. 2011 WHEREIN CARRY FORWARDS OF INCREASE IN BUSINESS LOS S CLAIMED IN 153A RETURN WAS ALLOWED BY THE BENCH BY HOLDING THAT RESTR ICTIVE PROVISIONS OF SECTION 80 DO NOT APPLY TO RETURN ACCEPTE D AND ASSESSED U/S. 153A OF THE ACT. HE FURTHER STATED THAT ISSUE IN DISPUTE IS ALSO COVERED BY THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX VS. NEERAJ JINDAL (2017) 393 ITR 1 (DELHI) WHEREIN THE H ONBLE HIGH COURT HELD THAT ONCE THE ASSESSEE FILES A REVISED RETU RN UNDER SECTION 153A, FOR ALL OTHER PROVISIONS OF THE ACT, T HE REVISED RETURN WILL BE TREATED AS THE ORIGINAL RETURN FILED UNDER SEC TION 139 OF THE ACT. THEREFORE, HE REQUESTED TO FOLLOW THE AFORESAID DECISIONS AND DIRECTED THE AO TO ALLOW THE CLAIM IN DISPUTE IN FAVOU R OF THE 18 ASSESSEE. 8.2 ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER O F THE AUTHORITIES BELOW. HE RELIED UPON THE DECISION OF ITAT KOLKATA IN THE CASE OF TANTIA CONSTRUCTIONS LTD VS DCIT 2016-TIOL- 2027-ITAT-KOL TO CONTEND THAT THE ASSESSMENT ONCE FRAMED U/S 143(3), THE SAME CANNOT BE DISTURBED IN PROCEEDINGS U/S 153A IN THE AB SENCE OF ANY INCRIMINATING MATERIAL FOUND IN SEARCH. HE THUS ARGUED THAT THE ACTION OF THE AO DISALLOWING CARRY FORWARD OF LOSS IN 153A ASSESSMENT IS PROPER, BECAUSE THE RETURN WAS BELATED IN ACCORDANCE WITH PROVISIONS OF SECTION 139(3). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT RECORDS ESPECIALLY THE CASE LAWS CITED BY BOTH THE PA RTIES. WE HAVE ALSO GONE THROUGH THE PROVISIONS OF SECTION 153A OF THE ACT WHICH IS REPRODUCED AS ABOVE. IT IS SEEN THAT SECTION 153A STA RTS WITH NON OBSTANTE CLAUSE WHICH INTER ALIA OVERRIDES THE PROVI SIONS OF SECTION 139. THIS SHOWS THAT RETURN FILED UNDER SECTION 153A IS A SEPARATE RETURN. LD. AR RELIED UPON THE JUDGMENT OF JURISDICTI ONAL HIGH COURT OF DELHI IN THE CASE OF PRINCIPAL COMMISSIONER OF I NCOME-TAX-19 VS NEERAJ JINDAL [2017] 393 ITR 1 (DELHI) WHEREIN IT WAS HELD THAT ONCE THE ASSESSEE FILES A REVISED RETURN UNDER SECTION 153 A, FOR ALL OTHER PROVISIONS OF THE ACT, THE REVISED RETURN WILL BE TREA TED AS THE ORIGINAL RETURN FILED UNDER SECTION 139. THE REFEREN CE TO REVISED 19 RETURN U/S 153A IN THIS DECISION REFERS TO RETURN U/S 153A. WHEN THE A.O. HAS ACCEPTED THE RETURN FILED BY THE ASSESSEE UNDE R SECTION 153A, NO OCCASION ARISES TO REFER TO THE PREVIOUS RETU RN FILED UNDER SECTION 139 OF THE ACT. FOR ALL PURPOSES OF THE ACT, THE RETURN THAT HAS TO BE LOOKED AT IS THE ONE FILED UNDER SECTION 15 3A. IN ASSESSEES CASE ALSO, THE RETURN FILED U/S 153A WAS ACCEPTED AND ASSESSED BY THE LD. AO. ALTHOUGH CARRY FORWARD OF LOS S WAS NOT ALLOWED IN 143(3) ASSESSMENT AS THE ORIGINAL RETURN U/S 139 WAS BELATED, WE ARE INCLINED TO FOLLOW THE RATIO IN THE AB OVE DECISION OF JURISDICTIONAL HIGH COURT TO ACCEPT THE CONTENTIONS OF THE ASSESSEE THAT IT IS THE RETURN U/S 153A WHICH IS TO BE CONSIDER ED FOR ALLOWABILITY OF CARRY FORWARD OF LOSS RATHER THAN THE ORIGINAL RETURN U/S 139. 9.1 WE NOTE THAT LD. COUNSEL OF THE ASSESSEE ALSO RELI ED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS B.G SHIRKE CONSTRUCTION TECHNOLOGY PVT LTD [2017] 79 TAXMANN .COM 306 (BOM) AND OF CHENNAI ITAT IN THE CASE OF ACIT, CENTRAL CIRCLE - 1(3), CHENNAI VS. V.N. DEVADOSS [2013] 32 TAXMANN.C OM 133 WHEREIN CLAIM OF DEDUCTION MADE FOR THE FIRST TIME IN 153A RETURN WAS DULY ALLOWED HOLDING THAT RETURNS FILED BY THE ASS ESSEE UNDER SECTION 153A ARE TO BE TREATED AS RETURNS FILED UNDER SECTION 139(1) BY VIRTUE OF THE LAW STATED IN SECTION 153A(1)(A). THE SAID TWO 20 DECISIONS ALSO SUPPORT THE ASSESSEES CASE THAT THE RETU RN U/S 153A IS TO BE TREATED AS RETURN FILED U/S 139(1). IN THE C ASE OF V.N DEVADOSS (SUPRA), DEDUCTION CLAIMED U/S 80-IB IN RETU RN FILED U/S 153A WAS ALLOWED EVEN THOUGH SUCH DEDUCTION WAS NOT CL AIMED IN A RETURN FILED U/S 139(1). 9.2 WE FURTHER FIND MERIT IN THE SUBMISSIONS OF LD. COUNSEL OF THE ASSESSEE WHO POINTED OUT THAT THE PROPOSITION THAT IN TH E ABSENCE OF INCRIMINATING MATERIAL FOUND IN SEARCH, THE ASSESSMEN T U/S 143(3) CANNOT BE DISTURBED AS RELIED UPON BY LD. DR CITING TH E DECISIONS OF KOLKATA ITAT IN THE CASE OF TANTIA CONSTRUCTIONS AND HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA IS NOT APPLIC ABLE IN THIS CASE . LD. DR TOTALLY MISDIRECTED HIMSELF IN RELYING UPON S AID JUDGMENT IN CASE OF TANTIA CONSTRUCTIONS AND KABUL CHAWLA AS THE SAME IS IN CONTEXT OF ADDITION IN SEARCH ASSESSMENT IN THE ABSEN CE OF INCRIMINATING MATERIAL. DECISION IN TANTIA CONSTRUCTIO NS AND KABUL CHAWLA DOES NOT DISCUSS AS TO WHETHER RETURN UNDER S ECTION 153A IS DEEMED TO BE A RETURN UNDER SECTION 139(1) AND THAT A CCORDINGLY, IT IS NOT HIT BY SECTION 80. IT WAS ALSO POINTED OUT BY THE LD. AR THAT THE SAID DECISION IN KABUL CHAWLA IS BEING CONTESTED IN APPEAL BEFORE HONBLE SUPREME COURT BY TAX DEPARTMENT ITSEL F. WE HAVE ALSO PERUSED THE SAID DECISION OF KOLKATA ITAT AND F OUND THAT THERE IS NO DISCUSSION IN THIS CASE AS TO THE ASPECTS THAT S ECTION 153A HAS 21 NON OBSTANTE CLAUSE OVERRIDING PROVISIONS OF SECTION 1 39. 153A RETURN ONCE ACCEPTED AND ASSESSED REPLACES THE ORIGIN AL RETURN AND THAT THE RETURN FILED U/S 153A IS DEEMED TO BE RETURN U/ S 139(1) AND THE RESTRICTIVE PROVISION OF SECTION 80 DOES NOT APPLY TO 153A RETURN. HOWEVER, THE DECISIONS CITED BY LD. AR INCLUDING THAT OF JURISDICTIONAL HIGH COURT IN CASE OF NEERAJ JINDAL ( SUPRA) AND ITAT, PUNE BENCH DECISION IN THE CASE OF SANJAY NANDLAL (SUPRA) DIRECTLY COVERING THE CASE OF THE ASSESSEE WERE NOT DISCUSSED IN THE SAID KOLKATA ITAT JUDGEMENT. LD. DR ALSO RELIED UPON THE JUDGEMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KABUL CHAWLA [2015] 380 ITR 573 (DELHI). HOWEVER, NO CONTRARY JUDGEMENT WAS PRODUCED BY THE LD. DR ON THIS ASPECT. 9.3 WE FURTHER FIND THAT ON EXACTLY SIMILAR FACTS AND CI RCUMSTANCES OF THE CASE, THE ITAT, PUNE BENCH IN THE CASE OF SA NJAY NANDLAL VYAS VS ITO, (ITAT PUNE) ITA NO 771 TO 774/PN/2010 VIDE ITS DATED 23.12.2011 HAS ADJUDICATED THE SIMILAR ISSUE I N FAVOUR OF THE ASSESSEE AS UNDER:- 4. THE RELEVANT FACTS ARE THAT THE ASSESSEE HAD FILED RETURN OF INCOME U/S 139(1) OF THE ACT FOR THE YEARS UNDER THE APPEALS DECLARING LOSSES FOR THE A.YS. 2002-03, 200 3-04 AND 2005-06 AND DECLARING NIL INCOME FOR THE A.Y. 2004- 05. THE ASSESSEE HAD AGAIN FILED RETURNS OF INCOME FOR THE YEARS UNDER CONSIDERATION IN RESPONSE TO THE NOTICES ISSU ED U/S. 22 153A OF THE ACT. IN THESE RETURNS, THE ASSESSEE HA D CLAIMED INTEREST EXPENDITURE ON LOAN FROM A CREDIT C O-OPERATIVE SOCIETY WHICH WAS NOT CLAIMED IN THE RETURNS OF INCOME FILED U/S. 139(1) OF THE ACT. THE A.O. ALLOWED THE SAID EXPENDITURE WHILE ASSESSING LOSS AND ALLOWED CARRY FORWARD OF THE LOSS ONLY TO THE EXTENT DECLARED IN THE ORI GINAL RETURN. THE INCREASE IN LOSS AS PER RETURNS FILED IN RESPON SE TO NOTICES U/S. 153A WAS NOT ALLOWED TO BE CARRIED FO RWARD BY THE A.O. IN VIEW OF THE PROVISIONS OF SECTION 80 OF THE ACT. THE A.O HELD THAT AS PER SECTION 80 OF THE ACT, THE LOSS WHICH IS NOT DETERMINED AS PER THE PROVISION OF SEC TION 139(3) OF THE ACT CANNOT BE CARRIED FORWARD. THE L D CIT(A) HAS UPHELD THE ACTION OF THE A.O WITH FURTHER OBSE RVATIONS THAT THE ASSESSEE HAD FILED RETURNS OF INCOME IN R ESPONSE TO NOTICES ISSUED U/S. 153A OF THE ACT BEYOND THE TIME LIMIT PRESCRIBED U/S. 139(5) FOR FILING THE REVISED RETUR N. THUS, THE RETURNS FILED BY THE ASSESSEE IN RESPONSE TO NO TICES ISSUED U/S. 153A OF THE ACT CANNOT BE REGARDED AS R EVISED RETURNS REPLACING THE ORIGINAL RETURNS FILED U/S. 1 39(1) OF THE ACT. HE ACCORDINGLY DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE THAT THE ORIGINAL RETURNS WERE REPLACED BY THE RETURNS FILED IN RESPONSE TO THE NOTICES ISSUED U/S . 153A OF THE ACT. 5. BEFORE US, THE LD A.R. WHILE REITERATING THE ABOVE CONTENTIONS MADE BEFORE THE AUTHORITIES BELOW, SUBM ITTED THAT UNDISPUTEDLY, RETURNS OF INCOME U/S. 139(1) O F THE ACT IN THE YEARS UNDER CONSIDERATION WERE FILED IN TIM E, HENCE THE ASSESSEE WAS VERY MUCH ENTITLED TO REVISE THE R ETURNS OF INCOME DURING THE PRESCRIBED TIME LIMIT, HENCE THE ASSESSEE HAD SATISFIED THE PROVISIONS OF SE CTION 80 PERMITTING CARRY FORWARD OF LOSS. HE CLARIFIED THAT AS PER 23 SECTION 80, THERE IS NO SUCH CONDITION THAT ONLY TH E LOSS CLAIMED IN THE RETURN FILED U/S. 139(1) CAN BE PERM ITTED TO BE CARRIED FORWARD. MERELY BECAUSE RETURNS OF INCOM E FILED U/S. 153A BY THE ASSESSEE BEYOND THE NOTICE PERIOD, DOES NOT CURTAIL TO ADOPT THOSE RETURNS OF INCOME FILED IN RESPONSE TO THE NOTICES U/S. 153A AS REVISED RETURNS. HE SUBMITTED FURTHER THAT FINALLY DETERMINED LOSS IN THE ASSESSMENT IS TO BE CARRIED FORWARD AS PER T HE LAW. HE PLACED RELIANCE ON THE FOLLOWING DECISIONS : 1. SUJANI TEXTILES (P) LTD. VS. ACIT (2004), 88 I TD 31 (MAD. ) 2. ESCORTS MAHLE LTD. VS.DCIT (2009) 119 ITD 119 (DEL.) 3. ACIT VS. MUPNAR FILMS LTD. (2009) 116 ITD 21 7 (INDORE) 4. ACIT VS. MAHESH J. PATEL (2004)91 TTJ 339 ( MUM) 5. KIRAN NAGJI NISAR VS. ITO (2008) 114 ITD 319 6. THE LD. D.R., ON THE OTHER HAND, TRIED TO JUS TIFY THE ORDERS OF THE AUTHORITIES BELOW ON THE ISSUE. HE S UBMITTED THAT LOSS DETERMINED IN ASSESSMENT CANNOT BE SAID I N PURSUANCE TO RETURNS OF INCOME FILED U/S. 139, BUT HERE ASSESSMENT IS ON THE RETURNS OF INCOME FILED U/S. 1 53A OF THE ACT. HE SUBMITTED THAT ASSESSMENT U/S 153A MADE ON THE ESCAPED INCOME IS BASED ON SEIZED MATERIAL. RETURN OF INCOME FILED IN RESPONSE TO NOTICES ISSUED U/S. 153 A CANNOT BE TREATED AS REVISED RETURN. HE SUBMITTED THAT W ORDINGS OF S. 147 AND S.153A ARE SIMILAR. HE EMPHASIZED TH AT RETURNS FILED IN RESPONSE TO THE NOTICE ISSUED U/S . 153A WERE FILED BEYOND THE TIME LIMIT PRESCRIBED U/S. 139( 5) OF THE ACT. THE LD D.R. POINTED OUT THAT RETURNS IN RESPONSE 24 TO NOTICE ISSUED U/S. 153A ON 11.7.2008 HAVE BEEN F ILED AFTER 9 MONTHS ON 30.3.09. HE PLACED RELIANCE ON T HE FOLLOWING DECISIONS : 1. STERI MOULD PVT. LTD. VS. DCIT, ITA NO.3637/ DEL/2009 2. KOPPIND (P) LTD. VS. CIT (1994) 207 ITR 228 ( CAL). 7. IN REJOINDER, LD. A.R. ALSO CLARIFIED THAT PR OVISIONS OF SECTION 153A PROVIDE FOR FRESH ASSESSMENT OF THE IN COME AND THE LD A.R. ALSO CLARIFIED THAT PROVISIONS OF SECTION 153A PROVIDE FOR FRESH ASSESSMENT OF THE INCOME AND THE ASSESSEE CAN ALSO MAKE A FRESH CLAIM. IN THIS REG ARD HE RELIED UPON THE DECISION OF MUMBAI BENCH OF THE TR IBUNAL IN THE CASE OF EVERSMILE CONSTRUCTION CO. PVT. L TD, ITA NO. 4238/MUM/2010., A.Y. 2001-02 DECIDED ON 30TH AUGUST 2011. A COPY OF THIS DECISION HAS BEE N FURNISHED FOR THE PERUSAL OF THE BENCH AND THE OTHER SIDE. 8. HAVING GONE THROUGH THE DECISION OF MUMBAI BE NCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. EVERSMILE CONSTRUCTION CO. PVT. LTD. (SUPRA), WE FIND THAT AN IDENTICAL ISSUE HAS BEEN DECIDED THEREIN. RELEVANT PARA NOS. 9 & 10 THEREOF ARE BEING REPRODUCED HEREUNDER : 9. IT IS FURTHER IMPORTANT TO NOTE THAT THE PROVISIONS OF ASSESSMENT IN THE CASE OF SEARCH U/S. 153A ETC. HAVE BEEN INSERTED BY THE FINANCE ACT, 2003 WITH EFFECT FROM 01.06.2003. THESE PROVISIONS ARE SUCCESSOR OF THE SPECIAL PROCEDURE FOR ASSESSMENT OF SEARCH CASES UNDER CHAPTER XIV-B STARTING WITH SECTION 158B. WHEREAS CHAPTER XIV-B 25 REQUIRED THE ASSESSMENT OF UNDISCLOSED INCOME AS A RESULT OF SEARCH, WHICH HAS BEEN DEFINED IN SECTION 158B(B), SECTION 153A DEALING WITH ASSESSMENT IN CASE OF SEARCH WITH EFFECT FROM 01.06.2003 REQUIRES THE ASSESSING OFFICER TO DETERMINE TOTAL INCOME AND NOT UNDISCLOSED INCOME. 10. IF ANY DEDUCTION IS CLAIMED BY THE ASSESSEE IN THE PROCEEDINGS U/S 153A THAT CANNOT BE REJECTED SIMPLY ON THE GROUND THAT IT WAS NOT CLAIMED IN THE ORIGINAL ASSESSMENT OR WAS DISALLOWED. THE STARTING POINT OF ASSESSMENT IS THE AMOUNT OF INCOME DECLARED IN THE RETURN OF INCOME, WHICH IS FURTHER ENHANCED WITH THE ADDITIONS. WE ARE UNABLE TO APPRECIATE THE QUALITATIVE DIFFERENCE BETWEEN THE TWO SITUATIONS VIZ., THE FIRST IN WHICH THE ASSESSEE FILES RETURN IN RESPONSE TO NOTICE U/S. 153A DISCLOSING LOWER INCOME THAN THE ONE ORIGINALLY ASSESSED U/S. 143(3) AND THE SECOND SITUATION IN WHICH THE INCOME IS DISCLOSED AT THE INCREASED LEVEL, THAT IS, AFTER CONSIDERING THE ADDITIONS SO MADE IN THE ORIGINAL ASSESSMENT AND THEN AGITATES DURING THE ASSESSMENT PROCEEDINGS ABOUT THE DEDUCTIBILITY OF THE AMOUNT(S) WHICH WAS/WERE NOT ALLOWED EARLIER. PROBABLY THE SECOND COURSE IS ADOPTED 26 SO AS TO PREMPT ANY MOVE ON THE PART OF THE REVENUE TO IMPOSE CONCEALMENT PENALTY, IF THE ADDITION IS SUSTAINED IN THE ASSESSMENT U/S. 153A. IN OUR CONSIDERED OPINION WHEN THE ASSESSING OFFICER HAS TO COMPUTE THE TOTAL INCOME OF THE ASSESSEE ON THE BASIS OF RETURN FILED AFTER CONSIDERING THE SUBMISSIONS MADE DURING THE COURSE OF HEARING BEFORE HIM. THERE CANNOT BE ANY SCOPE FOR ARGUING THAT THE ASSESSEE HAS BEEN RENDERED POWERLESS TO EVEN LODGE A CLAIM IN RESPECT OF WHICH DEDUCTION WAS NOT ALLOWED EARLIER. HERE IT IS IMPORTANT TO NOTE THAT THE TOTAL INCOME IS NOT REDUCED SIMPLY ON THE BASIS OF MAKING A CLAIM. THE ASSESSING OFFICER IS FULLY EMPOWERED TO CONSIDER THE QUESTION OF DEDUCTIBILITY AS PER THE PROVISIONS OF THE ACT. IF AFTER GOING THROUGH SUCH CLAIM, HE FEELS THAT ADDITION IS CALLED FOR, HE WILL OBVIOUSLY MAKE ADDITION AND VICE VERSA. WE FIND THAT IN THE ABOVE DISCUSSION AFTER DISCUSSI NG THE ISSUE IN DETAIL, THE MUMBAI BENCH HAS COME TO THE CONCLUSION THAT THERE IS DIFFERENCE IN WORDINGS U/S . 158B(B) AND SECTION 153A OF THE ACT. PROVISIONS U/S. 153A ARE SUCCESSOR OF THE SPECIAL PROCEDURE FOR ASSESSMENT O F SEARCH CASES UNDER CHAPTER XIV B STARTING WITH SEC TION 158B. CHAPTER XIV-B REQUIRED THE ASSESSMENT OF UNDISCLOSED INCOME AS A RESULT OF SEARCH, WHICH H AS BEEN DEFINED IN SECTION 158B(B) WHEREAS SECTION 153A DE ALING 27 WITH ASSESSMENT IN CASE OF SEARCH W.E.F. 1.6 .2003 REQUIRES THE A.O TO DETERMINE TOTAL INCOME AND NOT UNDISCLOSED INCOME UNDER THESE BACKGROUND, THE BOMBAY BENCH OF THE TRIBUNAL HAS HELD THAT WHEN THE A.O HAS TO COMPUTE THE TOTAL INCOME OF THE ASSE SSEE ON THE BASIS OF RETURN FILED AFTER CONSIDERING THE S UBMISSIONS MADE DURING THE COURSE OF HEARING BEFORE HIM, TH ERE CANNOT BE ANY SCOPE FOR ARGUING THAT THE A SSESSEE HAS BEEN RENDERED POWERLESS TO EVEN LODGE A CLAIM IN RE SPECT OF WHICH DEDUCTION WAS NOT ALLOWED EARLIER. THE A.O FULLY EMPOWERED TO CONSIDER THE QUESTION OF DEDUCTIBILI TY AS PER THE PROVISION OF THE ACT. IF AFTER GOING THROUGH SUCH CLAIM, HE FEELS THAT ADDITION IS CALLED FOR, HE WILL OBVIO USLY MAKE ADDITION AND VICE VERSA, HELD THE TRIBUNAL. 9. ALMOST SIMILAR ARE THE FACTS IN THE PRESENT C ASE BEFORE US AS THE ASSESSEE HAD CLAIMED INTEREST EXPENDI TURE OF LOAN FROM A CREDIT CO-OPERATIVE SOCIETY IN THE RETURNS FILED U/S. 153A WHICH WAS NOT CLAIMED IN THE RETURN S OF INCOME FILED U/S. 139(1) OF THE ACT. THE A.O HAD A LLOWED THE SAID EXPENDITURE WHILE ASSESSING LOSS. HOWEVER, T HE INCREASE IN LOSS AS PER RETURNS FILED IN RESPONSE T O NOTICES U/S. 153A WAS NOT ALLOWED TO BE CARRIED FORWARD IN VIEW OF THE PROVISIONS OF SECTION 80 OF THE ACT. THE A.O. HELD AS PER SECTION 80 OF THE ACT, THE LOSS WHICH IS NOT DETERM INED AS PER THE PROVISIONS OF SECTION 139(3) OF THE ACT CANNOT BE CARRIED FORWARD. THE LD CIT(A) HAS UPHEL D THE ACTION OF THE A.O WITH FURTHER OBSERVATIONS TH AT THE ASSESSEE HAD FILED RETURNS OF INCOME IN RESPONSE T O NOTICE ISSUED U/S. 153A OF THE ACT WHICH ARE BEYON D THE TIME LIMIT PRESCRIBED U/S. 139(5) FOR FILING REVIS ED RETURN. HENCE, THE RETURNS FILED BY THE ASSESSEE IN RESPONS E TO THE 28 NOTICES ISSUED U/S. 153A CANNOT BE REGARDED AS R EVISED RETURNS REPLACING THE ORIGINAL RETURNS FILED U/S. 139(1) OF THE ACT. SECTION 80 R.W.S. 139(3) OF T HE ACT LAID DOWN THE PROCEDURE FOR SUBMISSION OF RETURN FOR LO SSES AND CLAIM FOR THE SAME TO BE CARRIED FORWARD BUT DOE S NOT MEAN THAT THE A.O IS NOT EMPOWERED TO CONSID ER THE QUESTION OF DEDUCTIBILITY AS PER THE PROVISIONS OF THE ACT; IF AFTER GOING THROUGH SUCH CLAIM HE FEELS THAT IT IS NECESSARY TO CONSIDER FOR DETERMINING THE TOTAL INCOME I N THE ASSESSMENT U/S. 153A R.W.S. 143(3) OF THE ACT. TH E MADRAS BENCH OF THE TRIBUNAL IN THE CASE OF SUJANI TEXTILES (P) LTD. VS. ACIT (SUPRA) HELD THAT THE P ROCEDURAL PROCESS PROVIDED U/S. 139 DOES NOT IN ANY WAY AFFE CT SECTION 80 OR VICE VERSA. THE EQUATION BETWEEN SEC . 139(3) AND SEC. 80 IS INDEPENDENT. SEC. 80 PROVIDES THAT THE LOSS DETERMINED BY AN A.O IN PURSUANCE OF THE LO SS RETURN FILED U/S. 139(3) SHALL BE CARRIED FORWARD FOR THE SUCCEEDING A.YS. THE OPERATION OF SEC. 80 ENDS THERE. THE IN TER-SAY RELATION BETWEEN THE SUB-SECTION (1), (3) AND (5) O F SEC. 139 DOES NOT HAVE AN EQUATION OR INTER-LINKAGE WITH SECTION 80. THEREFORE, IF THE ASSESSEE HAS FILED A LOSS RE TURN U/S. 139(3) WITHIN THE PERIOD PROVIDED UNDER THE A CT AND IF THE ASSESSEE HAS FILED A REVISED LOSS RETURN UNDER SUB- SECTION (5) THEREOF AGAIN WITHIN THE PRESCRIBE D TIME LIMIT, THE A.O IS BOUND TO TAKE COGNIZANCE OF THE REVISED RETURN BECAUSE THE ORIGINAL RETURN IS REPLACED BY T HE REVISED RETURN, HELD THE TRIBUNAL. IN THE PRESENT CASE BEF ORE US, UNDISPUTEDLY, THE ASSESSMENT U/S. 153A R.W.S. 143( 3) OF THE ACT HAS BEEN FRAMED ON THE BASIS OF RETURN FILE D IN RESPONSE TO NOTICE ISSUE U/S. 153A OF THE ACT. HEN CE, NOW IT IS NOT OPEN TO RAISE CONTENTION BY THE REVENUE THA T RETURN WAS FILED BEYOND THE PRESCRIBED TIME PERIOD M ENTIONED 29 IN THE NOTICE ISSUED U/S. 153A OF THE ACT. THE RETURN OF INCOME FILED IN RESPONSE TO THE NOTICE U/S. 153A ON THE BASIS OF WHICH ASSESSMENT IN QUESTION HAS BEEN FRAM ED THUS HAS REPLACED THE ORIGINAL RETURN FOR DETERMINING TH E NET INCOME IN THE ASSESSMENT U/S. 153A OF THE ACT. THU S, IN A SENSE, RETURN FILED IN RESPONSE TO THE NOTICE ISSUE D U/S. 153A WAS A REVISED RETURN AND THE ASSESSMENT WAS RE- ASSESSMENT. FOR THE PURPOSE OF LEVY OF PENALTY U/S . 271(1)(C) OF THE ACT, EXCESS INCOME IN DIFFERENCE TO THE ORIGINALLY ASSESSED INCOME MAY BE SUBJECT MATTER UN DER THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE SAME W AS DUE TO CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHI NG INACCURATE PARTICULARS THEREOF, BUT FOR THE PURPOSE OF ASSESSMENT OF NET INCOME, THE RETURN FILED IN RESP ONSE TO NOTICE U/S. 153A OF THE ACT IS THE REVISED RETURN SUPERSEDING EARLIER RETURN OF INCOME AND TH E ASSESSMENT BASED UPON THAT ORIGINAL RETURN OF IN COME. WE THUS FOLLOWING THE RATIO LAID DOWN BY THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. EVERSM ILE CONSTRUCTION PVT. LTD. (SUPRA), HOLD THAT THE A.O WAS NOT JUSTIFIED IN DENYING THE CLAIM OF CARRY FORWA RD OF LOSS IN QUESTION IN THE A.YS. UNDER CONSIDERATION. 9.1 THE DECISION OF DELHI BENCH OF THE TR IBUNAL IN THE CASE OF STERI MOULDS PVT. LTD. (SUPRA) RELIED UPON BY THE LD. D.R TO SUPPORT HIS CONTENTION TH AT ONLY THE LOSS DECLARED IN THE RETURN FILED U/S. 139(1) CAN B E CARRIED FORWARD, IS NOT HELPFUL TO THE REVENUE AS F ACTS THEREIN ARE DISTINGUISHABLE. IN THAT CASE ASSESSEE H AD FILED THE ORIGINAL RETURN DECLARING POSITIVE INCOME AND NO R EVISED RETURN WAS FILED. THEREFORE THE ASSESSEE MADE A CL AIM IN THE ASSESSMENT PROCEEDINGS WHICH RESULTED IN POSITI VE 30 INCOME CONVERTED TO LOSE FIGURE. SINCE ASSESSEE HA D NOT FILED REVISED RETURN, THE TRIBUNAL HELD THAT THE LO SS CANNOT BE PERMITTED TO BE CARRIED FORWARD. HOWEVER IN THE CA SE OF ASSESSEE BEFORE US, HE HAD FILED THE RETURN U/ S. 153A DECLARING HIGHER LOSS. LIKEWISE, THE DECISI ON OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF KOPPIND P. LTD V S. CIT(SUPRA) IS ALSO NOT HELPFUL TO THE REVENUE AS TH E SAME WAS IN THE CONTEXT OF S. 147, WHEREIN IN THE REASSE SSMENT PROCEEDINGS ONLY ESCAPED INCOME CAN BE TAXED. W E DO NOT AGREE WITH THE SUBMISSION OF THE LD. D. R THAT WORDINGS OF S. 147 AND S. 153A ARE SIMILAR. WE ARE OF THE VIEW THAT U/S. 147 ONLY INCOME WHICH HAS ESCAPED ASSESSMENT CAN BE ASSESSED WHILE S.153A PERMITS FRE SH ASSESSMENT OF THE RETURN FILED BY THE ASSESSEE. WE THUS WHILE SETTING ASIDE ORDERS OF THE AUTHORITIES BELOW IN THIS REGARD DIRECT THE A.O TO ALLOW THE CLAIM OF C ARRY FORWARD OF LOSS IN QUESTION TO THE ASSESSEE. THE GROUNDS A RE ACCORDINGLY DECIDED IN FAVOUR OF THE ASSESSEE. 10. CONSEQUENTLY, APPEALS ARE ALLOWED. 9.4 KEEPING IN VIEW OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE DECISIONS OF HONBLE DELHI HIGH COURT DECISION IN THE CASE OF NEERAJ JINDAL (SUPRA) AND ITAT, PUNE BENCH DECISION IN THE CASE OF SANJAY NANDLAL (SUPRA), AS DISCUSSED ABOVE, WE FIND MERIT IN ASSESSEES SUBMISSIONS THAT U/S. 153A RETURN IS D EEMED TO BE RETURN U/S 139(1) AND THAT RESTRICTIVE PROVISIONS OF S ECTION 80 DO NOT APPLY TO THIS CASE. IT IS THE RETURN U/S 153A WHICH O NCE ACCEPTED AND ASSESSED, REPLACES THE ORIGINAL RETURN U/S 139. THEREFORE, THE 31 ASSESSEE IS ELIGIBLE FOR CARRY FORWARD OF BUSINESS LOSS IN DISPUTE, HENCE, THE AO IS DIRECTED TO ALLOW THE CLAIM OF CARR Y FORWARD OF BUSINESS LOSS IN QUESTION TO THE ASSESSEE. ACCORDINGL Y, THE GROUND RAISED IN THE CROSS OBJECTION IS DECIDED IN FAVOUR OF THE ASSESSEE AND CROSS OBJECTION IS ALLOWED. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TAND DISMISSED AND CROSS OBJECTION FILED BY THE ASSESSEE STAND ALLOW ED. ORDER PRONOUNCED ON 06/06/2018. SD/- SD/- [O.P. KANT] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 06/06/2018 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES