Income Tax Officer-II, Faizabad V. M/s Rajendra Agarwal (HUF), Faizabad

ITA 118/LKW/2015

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 2043 (ITAT-LUCKNOW)
• Duration Of Justice: 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-08-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 12-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT NIGARM
• Assessee Lawyers: P K KAPOOR
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.118/LKW/2015 ASSESSMENT YEAR:2010-11 INCOME TAX OFFICER-II FAIZABAD V. M/S RAJENDRA AGARWAL (HUF) 711, REKABGANJ FAIZABAD TAN/PAN:AAOHR6586E (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. AMIT NIGARM, D.R. RESPONDENT BY: SHRI. P. K. KAPOOR, C.A. DATE OF HEARING: 28 08 2015 DATE OF PRONOUNCEMENT: 31 08 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) ON VARIOUS GROUNDS, BUT THEY ALL RELATE TO THE ALLOWANCE OF SET OFF OF BUSINESS LOSS AGAINST THE INCOME FROM OTHER SOURCES AS PER PROVISIONS OF SECTION 71(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'). 2. THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME DECLARING TOTAL AGRICULTURAL INCOME AT RS.50,45,280/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE CLAIM OF TOTAL AGRICULTURAL INCOME. HE ACCORDINGLY TREATED 50% OF THE TOTAL INCOME AS AGRICULTURAL INCOME AND REST AS INCOME FROM OTHER SOURCES. THE ASSESSEE MOVED AN APPLICATION UNDER SECTION 154 OF THE ACT WITH THE SUBMISSION THAT THE ASSESSEE HAS SUFFERED A BUSINESS LOSS OF RS.68,38,222/- DURING THE YEAR :- 2 -: AND SINCE THE ASSESSING OFFICER HAS TREATED HALF OF THE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES, A SET OFF OF THE SAME MAY BE ALLOWED. BEING NOT CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE, THE ASSESSING OFFICER HAS DENIED THE SET OFF OF BUSINESS LOSS AGAINST INCOME FROM OTHER SOURCES ASSESSED BY THE ASSESSING OFFICER, AGAINST WHICH AN APPEAL WAS FILED BEFORE THE LD. CIT(A) AND THE LD. CIT(A), BEING CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE, HAS ALLOWED THE SET OFF OF BUSINESS LOSS AGAINST THE INCOME FROM OTHER SOURCES, AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AND THE LD. D.R. HAS PLACED RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER. 3. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS SUBMITTED THAT THE ASSESSEE IS ENTITLED FOR SET OFF OF BUSINESS LOSS AGAINST THE INCOME FROM OTHER SOURCES AS PER PROVISIONS OF SECTION 71(1) OF THE ACT. IN SUPPORT OF HIS CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE UPON THE PROVISIONS OF SECTION 71(1) OF THE ACT, ACCORDING TO WHICH THE SET OFF OF BUSINESS LOSS IS ALLOWABLE AGAINST THE INCOME FROM OTHER SOURCES IN THE SAME YEAR. 4. THE LD. D.R., IN REBUTTAL, HAS SUBMITTED THAT SINCE THE RETURN WAS FILED LATE, NEITHER CARRY FORWARD OF LOSS NOR SET OFF OF BUSINESS LOSS FROM OTHER SOURCES CAN BE ALLOWED. 5. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT IF THE RETURN IS FILED LATE, CARRY FORWARD BUSINESS LOSS IS NOT ALLOWABLE AS PER PROVISIONS OF SECTION 139(3) READ WITH SECTION 80 OF THE ACT, BUT AS PER PROVISIONS OF SECTION 71 (1) OF THE ACT, THE BUSINESS LOSS CAN BE SET OFF AGAINST THE INCOME UNDER ANOTHER HEADS. FOLLOWING THE PROVISIONS OF SECTION 71(1) OF THE ACT, THE LD. CIT(A) HAS ALLOWED SET OFF OF BUSINESS LOSS AGAINST INCOME FROM OTHER SOURCES, BUT SINCE THE RETURN WAS FILED LATE, CARRY FORWARD UNABSORBED BUSINESS LOSS CANNOT BE ALLOWED. WE, THEREFORE, FIND NO :- 3 -: INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND ACCORDINGLY WE CONFIRM THE SAME. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31 ST AUGUST, 2015 JJ:3108 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR