Hetero Med Solutions Limited., Hyderabad. V. Asst. Commissioner of Income Tax, Circle-2(2), Hyderabad.

ITA 1262/Hyd/2017

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6112 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2012-2013
• Appeal Filed On: 19-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROHIT MAJUMDAR
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 154; 143(3); 115JB; 150(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B”: HYDERABAD (THROUGH VIRTUAL CONFERENCE) B EFORE SH RI SA TBEER SING H GODA RA, JU DI CIA L MEM BER AND SHR I L AXMI PR AS A D SAHU , AC COUNT ANT MEMBE R ITA No. 1262/H/2017 Assessment Year: 2012-13 Hetero Med Solutions Ltd., Hyderabad. PAN – AABCH 9248M Vs. Asst. Commissioner of Income-tax, Circle – 2(2), Hyderabad. (Appellant) (Respondent) Assessee by: Shri S. Rama Rao Revenue by: Shri Rohit Majumdar Date of hearing: 30/11/2021 Date of pronouncement: 20/12/2021 O R D E R PER L.P. SAHU, A.M.: This appeal filed by the Assessee is directed against CIT(A) - 9, Hyderabad’s order dated 30/03/2017 for AY 2012-13 involving proceedings u/s 154 of the Income Tax Act, 1961 ; in short “the Act on the following grounds of appeal: “1. The order of the learned Commissioner of Income- Tax (Appeals) is erroneous both on facts and in law. ITA No.. 1262/Hyd/2017 H e t e r o M e d S o l u t i o n s L t d . , H y d . :- 2 -: 2. The learned Commissioner of Income-Tax (Appeals) erred in holding that there is a mistake in the order of assessment u/s 143(3) of the IncomeTax Act which can be rectified by the Assessing Officer by applying the provisions of Sec.154 of the I.T. Act. 3. The learned Commissioner of Income-Tax (Appeals) ought to have seen that the unabsorbed depreciation was Rs.97,73,447/- and not Rs.9,03,865/-. The learned CIT (Appeals) ought to have seen that while adjusting the business loss and depreciation, the Assessing Officer has to first adjust the business loss and thereafter the unabsorbed depreciation is to be adjusted. 4. Any other ground that may be urged at the time of hearing.” 2. We notice at the outset that assessee’s instant appeal suffers from 10 days delay in filing before the ITAT. To this the assessee filed a petition for condonation of the said delay along with an affidavit affirming therein that the counsel of the assessee was not well at the relevant point of time, which caused the impugned delay in filing the appeal. We rely on Case law Collector Land Acquisition Vs. Mst. Katiji & Ors, 1987 AIR 1353 (SC) and University of Delhi Vs. Union of India, Civil Appeal No. 9488 & 9489/2019 dated 17 December, 2019, hold that such a delay; supported by cogent reasons, deserves to be condoned so as to make way for the cause of substantial justice. We accordingly hold that assessee’s impugned delay in filing this appeal is neither intentional nor deliberate but due to ITA No.. 1262/Hyd/2017 H e t e r o M e d S o l u t i o n s L t d . , H y d . :- 3 -: the circumstances beyond its control. The same stands condoned. Case is now taken up for adjudication on merits. 3. Briefly the facts of the case are that the assessee filed its return of income for the AY 2012-13 on 29/09/2012 admitting nil income after set off of brought forward loss of Rs. 39,57,791/-. The AO completed the assessment by determining Nil income under normal provisions. While computing the tax liability under the MAT provisions, he gave adjustment of book loss of Rs. 93,52,808/-. Later, on verification of records, the AO found that there occurred a mistake apparent from record in adjusting the brought forward losses for the purposes of MAT calculation. It was noticed that book loss of Rs. 88,69.582/- was adjusted in Asst. Year 2011-12 itself by the assessee and hence only Rs.9,09,865/- was left for set off. However, set off of Rs. 93,52,808/- was claimed in computation of income and allowed as against Rs.9,03,865/- available. As this is a mistake apparent from record, the Assessing Officer issued notice u/s 154 on 31-08-2015. As no explanation was forth coming from the assessee, the AO held that the assessee had no objection to the proposed rectification and accordingly order u/s 154 was passed on 18/09/2015 determining the book profit at Rs.84,48,943/-. ITA No.. 1262/Hyd/2017 H e t e r o M e d S o l u t i o n s L t d . , H y d . :- 4 -: 4. Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A), who confirmed the order of the AO passed u/s 154 of the Act. 5. Still aggrieved, the assessee is in appeal before the ITAT. 6. Before us, the ld. AR of the assessee submitted that the AO did not consider the fact that in the earlier years business loss was deducted should be business loss alone and not unabsorbed depreciation. He submitted that the AO worked out unabsorbed depreciation after adjustment of Rs. 9,03,865/- as against Rs. 97,73,447/-, which is available as per working given by the assessee, which is placed at page 37 of the paper book. He, therefore, contended that the AO has calculated the profit in accordance with the provisions of section 115JB is not correct. He also submitted that there was no mistake apparent on the face of the record, which can be rectified by passing order u/s 154 of the Act inasmuch as the AO has assessed the income of the assessee u/s 143(3) of the Act and considered the MAT provisions in accordance with law. 7. The ld. DR, on the other hand, besides relying on the orders of revenue authorities, vehemently argued that the assessee has wrongly calculated book loss adjustment u/s 115JB in the previous AY and also claimed brought forward ITA No.. 1262/Hyd/2017 H e t e r o M e d S o l u t i o n s L t d . , H y d . :- 5 -: loss of Rs. 88,69,582/- which is evident from the return of income. Therefore, the only amount of Rs. 9,09,865/- was left for set off to the assessee. Since set off of Rs. 93,52,808/- was allowed as against Rs. 9,03,865/- available, the AO has rightly rectified the same u/s 154 of the Act which has been confirmed by the CIT(A). He, therefore, submitted that the arguments of the assessee are not tenable. 8. After considering the rival submissions and perusing the material on record as well as the orders of revenue authorities, it is observed that although the case before us is related to AY 2012-13 and the opening balance determined by the AO is Rs. 97,93,447/-, the return of income for the AY 2011-12 was assessed u/s 143(3) of the Act and the loss was determined at Rs. 97,73,447/-. Since the issue in dispute to be adjudicated is relating to order u/s 154, section 154 per se cannot travel beyond relevant/impugned AYs and, therefore, the grounds raised by the assessee on this issue are allowed. 8.1 However, it is observed that there is actual mistake in the AY 2011-12 and the assessee has also furnished wrong data before the AO at the time of assessment for the impugned AY 2012-13. The loss claimed in the return of income for AY 2011-12 of Rs. 88,69,582/- has not been reduced form the computation placed in the paper book at ITA No.. 1262/Hyd/2017 H e t e r o M e d S o l u t i o n s L t d . , H y d . :- 6 -: page 3. We find that the actual book loss in AY 2011-12 and, therefore, the mistake apparent relating to AY 2011-12 and not in AY 2012-13, which is consequentially allowed. In view of this, the AO is directed to apply section 150(1) and proper recourse may be taken for Ay 2011-12 and 2012-13 and decide the issue as per law to give consequential effect to the book loss determined in the AY 2011-12 and shall be given effect in AY 2012-13. 9. In the result, appeal of the assessee is allowed in above terms. Pronounced in the open court on 20 th December, 2021. Sd/- Sd/- (S.S. GODARA) (L. P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated: 20 th December, 2021. kv ITA No.. 1262/Hyd/2017 H e t e r o M e d S o l u t i o n s L t d . , H y d . :- 7 -: Copy to : 1 Hetero Med Solutions Ltd., H.No. 7-2-A2, Hetero Corporate Industrial Estate, Santhnagar, Hyderabad. 2 ACIT, Circle – 2(2), Signature Towers, Kondapur, Hyderabad. 3 CIT(A) - 9, Hyderabad. 4 Pr. CIT – 2, Hyderabad 5 ITAT, DR, Hyderabad. 6 Guard File.