Appeal details
Counselvise Citation
[2018] 123 COUNSELVISE.COM (IT) 3831 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
22-06-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
C
Assessment Year
2009-2010
Appeal Filed On
18-05-2018
Judgement Text
, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH C BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.3596/AHD/2015 WITH CO NO.07/AHD/2018 / ASSTT. YEAR: 2009-2010 ITO, WARD-4 ANAND. VS. M/S.SRI SAI CONSTRUCTION R.I. COMPLEX, LG-9 OPP: HOME SCIENCE COLLEGE MOTA BAZAR, V.V.NAGAR ANAND 388120. PAN : AAZFS 8266 R / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI PRASOON KABRA, SR.DR ASSESSEE BY : SHRI U.S. BHATI, AR ! / DATE OF HEARING : 19/06/2018 '#$ ! / DATE OF PRONOUNCEMENT: 22 /06/2018 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST TH E ORDER OF THE LD.CIT(A)-4, VADODARA DATED 25.9.2015 PASSED FOR TH E ASSESSMENT YEAR 2009-10. ON RECEIPT OF NOTICE IN THE REVENUES APP EAL, THE ASSESSEE HAS FILED CROSS-OBJECTION BEARING NO.CO.7AHD/2018. 2. THOUGH REVENUE HAS TAKEN FOUR GROUNDS OF APPEAL, BUT ITS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE WHEREBY IT HAS PLEADED THAT THE LD.CIT(A) HAS ERRED IN DIRECTING THE AO TO ALLO W CARRY FORWARD OF LOSS ITA NO.3596/AHD/2015 WITH CO 2 AND UNABSORBED DEPRECIATION OF ASSESSMENT YEAR 2008 -09 TO BE SET OFF AGAINST PROFIT OF PRESENT ASSESSMENT YEAR. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED ITS RETURN OF INCOME ON 22.9.2009 DECLARING NIL INCOME. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOTICE UND ER SECTION 143(2) WAS ISSUED AND SERVED UPON THE ASSESSEE. THE LD.AO HAS PASSED ASSESSMENT ORDER UNDER SECTION 143(3) ON 21.10.2011 . HE COMPUTED THE INCOME OF THE ASSESSEE AS UNDER: SUBJECT TO THE ABOVE REMARKS AND ON THE BASIS OF T HE DISCUSSION, THE TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UND ER: INCOME SHOWN AS PER RETURN 48,39,767/- ADD: I) DISALLOWANCE OUT OF SHED 1,00,000/- II) OUT OF VEHICLE EXPENSES 20,000/- TOTAL INCOME 49,59,767/- ROUNDED OFF TO 49,59,770/- THE ASSESSMENT ORDER FOR THE A.Y.2008-09 IS PASSED ON 28.4.2010 DETERMINING THE NET LOSS AT RS.49,42,320/-. THERE IS ALSO UNABSORBED DEPRECIATION OF EARLIER YEARS AT RS.28,7 4,621/-. THE BUSINESS LOSS AND UNABSORBED DEPRECIATION IS ALLOWE D TO BE CARRIED FORWARD AS UNDER: TOTAL INCOME AS ABOVE RS.49,59,770/- LESS: LOSS OF EARLIER YEAR RS.49,42,320/- BUSINESS LOSS TO BE C/F. RS.17,450/- INCOME FROM CAPITAL GAIN RS.18,70,010/- LESS: UNABSORBED DEPRECIATION OF EARLIER YEARS RS.28,74,621/- BUT RESTRICTED TO RS.18,70,010/- BALANCE RS.10,04,611/- IS ALLOWED TO BE CARRIED FOR WARD. 4. THE AO THEREAFTER REOPENED THE ASSESSMENT BY ISS UING A NOTICE UNDER SECTION 148 OF THE ACT. HE RECORDED FOLLOWIN G REASONS: NAME & ADDRESS OF THE ASSESSEE : M/S. SAI CONSTRUCTION LG-9, R.K. COMPLEX, OPP: HOME SCIENCE COLLEGE, MOTA BAZAR, ITA NO.3596/AHD/2015 WITH CO 3 V.V.NAGAR - 388120 STATUS : RF PAN : AAZFS8266R A.Y. : 2009-10 REASONS FOR REOPENING U/S.147 OF THE IT ACT THE ASSESSEE HAS FILED RETURN OF INCOME ON 22/09/20 09, DECLARING TOTAL INCOME OF RS. NIL AFTER SET OFF BROUGHT FORWARD LOSS . 2. ON VERIFICATION OF CASE RECORD, IT IS NOTICED TH AT U/S, 80 OF THE ACT, CARRY FORWARD OF LOSS AMOUNTING TO RS. 16,86,771/- IS ELIGIBLE INSTEAD OF CLAIMED RS. 33,71,169/- FOR A.Y. 2008-09. AS THE REVIS ED RETURN FOR A.Y. 2008-09 WAS NOT FILED IN TIME. FOR A.Y.2009-10, THE ASSESSEE IS NOT ENTITLED TO CARRY FORWARD THE LOSS IN WHICH RETURN WAS NOT FILED IN DUE DATE. HENCE, THE EXCESS LOSS AMOUNTING TO RS. 33,70, 169/-CANNOT BE CARRIED FORWARD AND SET OFF SUBSEQUENT A.Y. I.E. IN A.Y. 2009-10 AND ABOVE RESULTING THE UNDER ASSESSMENT OF RS. 11,51,451/-. 3. FURTHER, THE ASSESSEE IS HAVING CAPITAL GAIN AMOU NTING TO RS. 18 LAC WHICH IS SET OFF AGAINST UNABSORBED DEPRECIATION AM OUNTING TO RS. 28,74,621 WHICH WAS ALLOWED WHILE PASSING ASSESSMEN T ORDER U/S. 143(3) OF THE L.T. ACT. THE SAME HAS NOT BEEN VERIFIED WHET HER FROM THE AUDIT REPORT OR ANY SUPPORTING WHICH WAS ATTACHED WITH TH E RECORD. THIS RESULTED IN THE UNDER ASSESSMENT OF RS. 3,70,800/-. 4. I HAVE THEREFORE, REASON TO BELIEVE THAT THE CLA IM OF DEPRECIATION IS TO BE VERIFIED. IN VIEW OF THE ABOVE, THE CASE IS SELE CTED FOR SCRUTINY. SD/- (P.C. DARJI) INCOME TAX OFFICER WARD-4, ANAND 5. THE LD.AO WAS OF THE VIEW THAT REVISED RETURN IN THE ASSESSMENT YEAR 2008-09 WAS NOT FILED IN TIME UNDER SECTION 13 9(5) OF THE ACT I.E. IT WAS A BELATED RETURN, AND THEREFORE, THE ASSESSEE C ANNOT CLAIM LOSS FOR CARRY FORWARD LOSS. IN HIS OPINION, IF LOSS OF ASS ESSMENT YEAR 2008-09 ALLOWED TO BE CARRIED FORWARD IS NOT AVAILABLE TO T HE ASSESSEE, THEN SET OFF OF RS.49,42,320/- GRANTED IN THIS YEAR WILL NOT BE AVAILABLE. ON THE ITA NO.3596/AHD/2015 WITH CO 4 BASIS OF THIS PRESUMPTION, HE PASSED RE-ASSESSMENT ORDER ON 5.2.2015 AND DETERMINED TAXABLE INCOME AS UNDER: TOTAL INCOME AS PER ORDER U/S.143(3) DATED 21.10.2011 RS.49,59,767/- LESS: B/F OF LOSS OF EARLIER YEARS AS DISCUSSED ABOVE RS.16,86,771/- TOTAL BUSINESS INCOME RS.32,72,996/- ADD: CAPITAL GAIN AS DISCLOSED AND AS DISCUSSED ABOVE RS.18,70,010/- TOTAL TAXABLE INCOME RS.51,43,006/- TOTAL TAXABLE INCOME U/S.288 RS.51,43,010/- 6. ON APPEAL, THE LD.CIT(A) HAS OBSERVED THAT ONCE IN SCRUTINY ASSESSMENT PASSED UNDER SECTION 143(3) OF THE ACT, THE ASSESSEE HAS BEEN ALLOWED TO CARRY FORWARD LOSS OF RS.49,42,320/ -, THEN DETERMINATION OF SUCH LOSS CANNOT BE DISTURBED IN T HE SUBSEQUENT ASSESSMENT YEAR. 7. IN THE CO THE ASSESSEE HAS CHALLENGED REOPENING OF THE ASSESSMENT. THE LD.COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THERE WAS NO MATERIAL WITH THE AO TO FORM A BELIEF THAT INCOM E HAS ESCAPED ASSESSMENT IN ASSESSMENT YEAR 2009-10. ON THE OTHE R HAND, THE LD.DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES. 8. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. WE DO NOT FIND ANY M ERIT IN THIS APPEAL OF THE REVENUE, BECAUSE; RIGHTLY OR WRONGLY; IF THE LO SS HAS BEEN DETERMINED IN THE ASSESSMENT YEAR 2008-09 IN A SCRU TINY ASSESSMENT, AND THE ASSESSEE HAS BEEN ALLOWED TO CARRY FORWARD IT FOR FUTURE YEARS, THEN IN FUTURE YEARS THE AO CANNOT SAY THAT CARRY F ORWARD WAS WRONGLY ALLOWED TO THE ASSESSEE. HE HAS TO REOPEN THE ASSE SSMENT YEAR 2008- 09 ONLY AND TO DETERMINE THE EXACT AMOUNT OF LOSS I F ANY, COULD BE ALLOWED TO THE ASSESSEE FOR CARRY FORWARD. NO SUCH EXERCISE HAS BEEN DONE, AND THEREFORE, THE LD.CIT(A) HAS RIGHTLY ALLO WED THE ASSESSEE TO ITA NO.3596/AHD/2015 WITH CO 5 CARRY FORWARD OF LOSS AT RS.49,42,320/- FOR SET OFF IN THE ASSESSMENT YEAR 2009-10. 9. INSOFAR AS CO OF THE ASSESSEE IS CONCERNED, WE F IND THAT THE REASONS EXTRACTED (SUPRA) DOES NOT DISCLOSE ANY MAT ERIAL WHICH CAN ENABLE THE AO TO FORM A BELIEF THAT INCOME HAS ESCA PED ASSESSMENT IN ASSESSMENT YEAR 2009-10. HE IS NARRATING THE FACTS FOR THE ASSESSMENT YEAR 2008-09 WHEREIN EXCESS LOSS ALLEGED TO HAVE BE EN DETERMINED FOR CARRY FORWARD FOR THE FUTURE YEARS. SIMILARLY, WIT H REGARD TO UNABSORBED DEPRECIATION IS CONCERNED, BOTH THESE AMOUNTS HAVE BEEN DETERMINED IN A SCRUTINY ASSESSMENT FOR THE ASSESSMENT YEAR 2008- 09. IT IS ALSO PERTINENT TO OBSERVE THAT IN BOTH THE ASSESSMENT YE ARS I.E. 2008-09 AND 2009-10 SCRUTINY ASSESSMENT WAS MADE. A PERUSAL OF THE REASON WOULD SHOW THAT THERE IS NO NEXUS BETWEEN FACTS MENTIONED BY THE AO VIS-- VIS HIS BELIEF THAT INCOME HAS ESCAPED ASSESSMENT I N A.Y.2009-10. IF ANY EXCESS CLAIM OF LOSS WAS MADE THEN IT WAS IN TH E A.Y.2008-09. THIS EXCESS CLAIM HAS BEEN HARBOURED BY THE AO ON THE GR OUND THAT REVISED RETURN WAS NOT FILED BY THE ASSESSEE WITHIN TIME LI MIT. IT IS NOT ASCERTAINABLE AS TO HOW EXCESS CLAIM ALLOWABLE TO T HE ASSESSEE IN A.Y.2008-09 WOULD BE TERMED AS ESCAPED INCOME IN TH E A.Y.2009-10. THUS, FOR THE REASONS STATED ABOVE, WE ARE OF THE V IEW THAT THE AO WAS NOT JUSTIFIED IN REOPENING ASSESSMENT YEAR 2009-10. THEREFORE, THE GROUND TAKEN IN THE CO IS ALLOWED AND RE-ASSESSMENT ORDER IS QUASHED. 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED, WHILE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 22 ND JUNE, 2018 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 22/06/2018
