The Dharangadhra People's Co. Op. Bank Ltd., Dhrangadhra V. The Dy. Commr. Income Tax, Surendranagar Circle, Surendranagar

ITA 130/RJT/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1064 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 24-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DM RINDANI
• Keywords: Business income; Depreciation; Bad and doubtful debts; Revised return; Unabsorbed depreciation; Set aside; Capital Gains
• Section: 143(3); 139(5); 80P; 139(1); 139(4); 73; 72; 13; 131; 56; 28; 154; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT , , BEFORE SHRI RAJPAL YADAV , JUDICIAL MEMBER & SHRI WASEEM AHMED , ACCOUNTANT MEMBER ./ I.T.A. NO S . 1 30 - 131 /RJT/2017 ( / ASSESSMENT YEARS : 2012 - 1 3 & 2013 - 14 ) THE DHARANGADHRA PEOPLE S CO - OP. BANK LTD. , KALPVARKSH , MANDVI CHOWK, DHRANGADHARA, SURENDRANAGAR CIRCLE, SURENDRANAGAR. / VS. D.C.I.T , SURENDRANAGAR CIRCLE , SURENDRANAGAR . ./ ./ PAN/GIR NO. : AAAAT1192R ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI D.M. RINDANI , A.R / RESPONDENT BY : SHRI ANIL KUMAR , SR. D . R / DATE OF HEARING 20 /09 /201 9 / DATE OF PRONOUNCEMENT 18 / 12 /201 9 / O R D E R PER WASEEM AHMED ACCOUNTANT M EMBER : THE CAPTIONED APPEAL HA S BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE SEPARATE ORDER OF THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS) - 7 , AHMEDABAD [ LD. CIT(A) IN SHORT] OF EVEN DATED 01/02/2017 , ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER R EFERRED TO AS 'THE ACT') DATED 16/0 2/20 15 & 27/11/2015 RELEVANT TO ASSESSMENT YEAR S (A . Y . S ) 2012 - 1 3 & 2013 - 14 RESPECTIVELY . ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 2 - ITA NO.130/RJT/2017 FOR A.Y.2012 - 13. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 7, AHMEDABAD ERRED IN CONFIRMING ACTION OF THE ASSESSING OFFICER IN NOT ACCEPTING THE REVISED RETURN FILED BY THE APPELLANT ON 20 - 03 - 2014. 2. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 7, AHMEDABAD ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING THE CLAIM OF LOSS OF RS.1,56,71,108/ - BEING IRRECOVERABLE AMOUNT OF DEPOSITS PLACED BY THE APPELLANT - BANK WITH MA DHAVPURA MERCANTILE CO - OPERATIVE BANK LTD. 3. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 7, AHMEDABAD ERRED IN HOLDING THAT THE EXPLANATION OFFERED BY THE APPELLANT FOR HAVING CLAIMED THE AMOUNT OF RS. 1,56,71,108/ - AS BUSINESS LOSS IN A.Y. 2012 - 13 D OES NOT HOLD WATER. 4. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 7, AHMEDABAD ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN NOT ALLOWING TO CARRY FORWARD AND SET OFF OF LOSS OF RS. 2,31,857/ - FOR A.Y. 2005 - 06 AND RS. 16,71,665/ - FOR A.Y. 20 06 - 07 BY FAILING TO APPRECIATE THE DISTINCTION BETWEEN AN EXEMPTION AND A DEDUCTION PROVISION. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER AND WITHDRAW ANY GROUND OF APPEAL ANYTIME UP TO THE HEARING OF THIS APPEAL. 2. T HE 1 ST INTERCONNECTED ISSUE RAISED BY THE ASSESSEE IN GROUND NUMBERS 1 TO 3 IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ORDER OF THE AO BY NOT ACCEPTING THE REVISED RETURN OF INCOME AND DISALLOWING THE CLAIM OF LOSS FOR RS. 1,56,71,108.00 ONLY. 3. THE FACTS IN BRIEF ARE THA T THE ASSESSEE IN THE PRESENT CASE IS A CO - OPERATIVE SOCIETY AND ENGAGED IN THE CO - OPERATIVE BANKING BUSINESS. THE ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 3 - ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD FILED ITS RETURN OF INCOME DATED 31 AUGUST 2012 DECLARING AN INCOME OF NIL. AS SUCH THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAS SHOWN AN INCOME IN THE STATEMENT OF INCOME OF 65 , 74 , 118 .00 ONLY WHICH WAS SET OFF AGAINST THE BROUGHT FORWARD LOSSES AMOUNTING TO 1,05,25,004.00 (THE ACTUAL SET OFF OF THE LOSS FOR 65,74, 118.00 AND THE BALANCE AMOUNT OF 39,50,886.00 WAS CARRIED FORWARD). 3.1 SUBSEQUENTLY, THE ASSESSEE REVISED ITS RETURN OF INCOME UNDER SECTION 139(4) OF THE ACT DATED 20 - 03 - 2014 WHEREIN BUSINESS LOSS OF 1,56,71,108.00 WAS CLAIMED WHICH RESULTED THE LO SS FOR THE CURRENT YEAR AT 90,96,990.00 AND THE SAME WAS CARRIED FORWARD TO THE SUBSEQUENT YEAR. THE IMPUGNED LOSS WAS REPRESENTING THE FDR S WRITTEN OFF MADE WITH MADHAVPURA MERCANTI LE CO - OPERATIVE BANK LTD. (IN SHORT MMCBL) WHICH HAS GONE INTO THE LIQU IDATION. ACCORDINGLY THE ASSESSEE ALSO CARRIED FORWARD LOSSES AND THE UNABSORBED DEPRECIATION OF THE EARLIER YEARS WHICH WAS SET OFF IN THE ORIGINAL RETURN OF INCOME. 3.2 THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS CLAIMED THAT THE IMPUGNED LOSS WAS C LAIMED IN THE YEAR UNDER CONSIDERATION AS PER THE LETTER WRITTEN BY RBI DATED 10 APRIL 2012. 3.3 HOWEVER, THE AO WAS DISSATISFIED WITH THE CLAIM OF THE ASSESSEE MADE IN THE REVISED RETURN OF INCOME UNDER SECTION 139(4) OF THE ACT DATED 20 MARCH 2014 FOR TECHNICAL REASONS AS WELL AS ON MERIT. 3.4 AS PER THE AO THE IMPUGNED LOSS CANNOT BE CARRIED FORWARD AND SET - OFF UNTIL AND UNLESS IT HAS BEEN DETERMINED IN THE RETURN FILED UNDER SECTION 139(3) OF THE ACT AS PER THE PROVISIONS OF SECTION 80 OF THE ACT. T HUS THE AO ON THE TECHNICAL COUNT PROPOSED NOT TO ALLOW THE CLAIM OF THE ASSESSEE. ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 4 - 3.5 THE AO ON MERIT OBSERVED CERTAIN FACTS AS DETAILED UNDER: I. THE ASSESSEE HAS CREATED A N INVESTMENT DEPRECIATION FUND ON ACCOUNT OF SUCH INVESTMENTS IN MMCBL. THE DETAIL S OF SUCH FUND STAND AS UNDER: M ADHAV - PURA MERCANTILE CO - OPERATIVE BANK INVESTMENT DEPRECIATION FUND UP TO 31.03.2011 DATE OF DEPOSIT IN THE ABOVE FUND SOURCE OF ABOVE FUND AMOUNT OF FUNDS TRANSFERRED FROM THE FUNDS AS PER PARA 2 TOTAL FUND TRANSFERRED TO THIS FUND CLOSING BALANCE IN THIS FUND I.E MMCB INVESTMENT DEPRECIATION FUND 31.03.2011 INVESTMENT DEPRECIATION RESERVE FUND 11,71,000/ - 51,00,000/ - 51,00,000/ - BAD AND DOUBTFUL DEBT FUND 39,29,000/ - THEREAFTER THE ASSESSEE HAS FURTHER CREDITED THE ABOVE FUNDS WITH THE FOLLOWING SOURCES UP TO 31.03.2012: - MADHAV - PURA MERCANTILE CO - OPERATIVE BANK INVESTMENT DEPRECIATION FUND UP TO 31.03.2012 DATE OF DEPOSIT IN THE ABOVE FUND SOURCE OF ABOVE FUND AMOUNT OF FUNDS TRANSFERRED FROM THE FUNDS AS PER PARA 2 TOTAL FUND TRANSFERRED TO THIS FUND CLOSING BALANCE IN THIS FUND I.E MMCB INVESTMENT DEPRECIATION FUND 11.10.2011 BAD AND DOUBTFUL DEBT FUND 40,00,000/ - 91,00,000/ - 91,00,000/ - UP TO DATE 05.12.2011 BAD AND DOUBTFUL DEBT FUND 45,00,000/ - 1,36,00,000/ - 1,5671108/ - UP TO DATE FROM PROFIT AND LOSS A/C 20,71,108 / - 1,56,71,108/ - THE AO ON THE BASIS OF THE ABOVE FOUND THAT THE PROVISION FOR THE LOSS ON ACCOUNT OF THE FDR S IN MMCBL HAS ALREADY BEEN SOURCED FROM THE INVESTMENT DEPRECIATION RESERVE FUND/BAD AND DOUBTFUL ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 5 - DEBT FUND/PROFIT AND LOSS ACCOUNT. ACCORDINGLY HE WAS OF THE VIE W THAT FURTHER DEDUCTION IN THE RETURN OF INCOME ON ACCOUNT OF IMPUGNED LOSS WOULD LEAD TO DOUBLE DEDUCTION FOR THE SAME BUSINESS LOSS AS DISCUSSED ABOVE. II. THE AO ALSO NOTICED THAT THE ASSESSEE HAS NOT FURNISHED THE NATURE OF SUCH LOSS AND SIMILARLY THERE WAS NO INFORMATION ABOUT THE FINANCIAL YEAR TO WHICH SUCH LOSS RELATES. THE AUDITOR HAS ALSO NOT SPECIFIED ABOUT SUCH LOSS IN HIS REPORT FILED ALONG WITH THE RETURN OF INCOME. SIMILARLY THERE WAS NO ENTRY IN THE BOOKS OF ACCOUNTS FOR CLAIMING THE LOSS ON A CCOUNT OF SUCH FDR S MAINTAINED WITH MMCBL. III. THE AO ALSO NOTED THAT THE AMOUNT TO THE EXTENT OF 1 , 24 , 29000 .00 SOURCED FROM THE BAD AND DOUBTFUL DEBT FUND HAS ALREADY BEEN ALLOWED AS DEDUCTION UNDER SECTION 36 (1)(VIIA) OF THE ACT AT THE RATE OF 7.50% OF THE TOTAL INCOME IRRESPECTIVE OF THE FACT WHETHER THERE WAS ANY ACTUAL CLAIM O R NOT. AS SUCH THE AMOUNT SOURCED FROM THE BAD AND DOUBTFUL DEBT FUND SHOWS THAT THE ASSESSEE HAS ALREADY ENJOYED THE BENEFIT BY CLAIMING THE DEDUCTION AND THERE IS A CREDIT BAL ANCE AT 3,98,84,000.00 AS APPEARING IN THE BALANCE SHEET AS ON 31 ST MARCH 2011. IV. THE FACT OF SUCH LOSS ABOUT THE RECOVERAB I LITY OF FDR S FROM MMCBL WAS KNOWN TO THE ASSESSEE SINCE MANY YEARS AND THEREFORE THERE WAS NO REASON FOR CLAIMING THE DEDUCTION I N THE YEAR UNDER CONSIDERATION. THE LETTER WRITTEN BY THE RBI WAS NEITHER ANY CIRCULAR, INSTRUCTION , STATUTORY ORDER NOR WARNING BUT IT WAS AN ADVISORY LETTER AFTER THE STATUTORY INSPECTION OF THE ASSESSEE BANK. ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 6 - V. THE INCOME FROM THE FDR S MADE WITH MMCBL WAS SUBJECT TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES UNDER SECTION 56 OF THE ACT AND THEREFORE SUCH BUSINESS LOSS CANNOT BE ALLOWED AS DEDUCTION UNDER SECTION 28, 36 AND 3 7 OF THE ACT WHICH RELATES TO THE BUSINESS AND PROFESSION. IN VIEW OF THE ABO VE, THE AO DISALLOWED THE CLAIM OF THE ASSESSEE ON ACCOUNT OF THE LOSS INCURRED ON THE FDR S MAINTAINED WITH MMCBL FOR 1,56,71,108.00. ACCORDINGLY THE LOSS OF 90,96,990.00 AS DECLARED IN THE REVISED RETURN OF INCOME WAS DISALLOWED AND ADDED TO THE TOTA L INCOME OF THE ASSESSEE. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). 4. THE ASSESSEE ON TECHNICAL COUNT SUBMITTED THAT THE ORIGINAL RETURN FILED BY IT WA S SHOWING UNABSORBED LOSSES AND THE DEPRECIATION. THUS IT CANNOT BE SAID THAT THE ORIGINAL RETURN WAS NOT THE RETURN OF LOSS. FURTHERMORE THE ORIGINAL RETURN WAS FILED WITHIN THE TIME ALLOWED UNDER SECTION 139(1) OF THE ACT AND THEREFORE THE SAME CAN BE RE VISED UNDER SECTION 139(4) OF THE ACT. 4.1 THE ASSESSEE ON MERIT SUBMITTED THAT THE FDR S IN MMCBL WAS MADE IN ITS NORMAL COURSE OF BUSINESS. THE INTEREST INCOME FROM SUCH FDR S IN THE PAST WAS OFFERED TO TAX. THE FIXED DEPOSITS MADE WITH THE MMCBL WERE REPRESENTING THE STOCK IN TRADE FOR THE ASSESSEE. AS SUCH THE AMOUNT OF INTEREST INCOME OF THE FDR S MADE WITH MMCBL IS AKIN TO THE LOAN AND ADVANCES GIVEN TO THE CUSTOMERS. THEREFORE THE SAME IS ELIGIBLE FOR DEDUCTION. 4.2 THE ASSESSEE ALSO SUBMITTED TH AT IT HAS NOT CLAIMED ANY DEDUCTION BY WAY OF PROVISION FOR BAD AND DOUBTFUL DEBTS AT THE RATE OF 7.5% OF THE ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 7 - CURRENT YEAR INCO ME AS PROVIDED UNDER SECTION 36( 1 ) (VIIA) OF THE ACT IN THE PAST EXCEPT FOR THE ASSESSMENT YEAR 2008 - 09, 2010 - 11 AND 2011 - 12 WHICH IS VERY NOMINAL IN COMPARISON TO THE PROVISION FOR BAD AND DOUBTFUL FUND. 4.3 THE ASSESSEE ALSO CLAIMED THAT SUCH BUSINESS LOSS ON ACCOUNT OF FDR S MADE WITH MMCBL CLAIMED IN THE YEAR UNDER CONSIDERATION WAS AS PER THE DIRECTION OF THE RBI WHICH IS BINDING ON IT. 4.4 THE AMOUNT OF PROVISIONS SUCH AS INVESTMENT DEPRECIATION RESERVE FUND, BAD AND DOUBTFUL DEBT FUND WERE NOT ALLOWED AS DEDUCTION IN THE PAST. AS SUCH ALL THESE FUNDS HAVE SUFFERED THE TAX IN THE EARLIER YEARS. THEREFORE, THE ALLEGATION OF THE AO THAT THE ASSESSEE IS GETTING DOUBLE BENEFIT BY WRITING OFF THE FDR S WITH THE MMCBL IS BASED ON WRONG ASSUMPTION OF FACTS. 4.5 HOWEVER, THE LEARNED CIT (A) DISREGARDED THE CONTENTION OF THE ASSESSEE BY HOLDING THAT A LOSS RETURN UNDER SECTION 139(3) CAN BE FILED WITHIN THE TIME ALLOWED UNDER SECTION 139(1) OF THE ACT. HOWEVER, THE ASSESSEE HAS NOT FILED LOSS RETURN WITHIN THE TIME SPECIFIED UNDER SECTION 139(1) OF THE ACT DESPITE THE FACT THAT IT WAS IN THE KNOWLEDGE OF THE ASSESSEE ABOUT THE POSITION OF THE FDR S WITH THE MMCBL. ACCORDINGLY, THE LEARNED CIT (A) HELD THAT THE RETURN FILED UNDER SECTION 139(4) SHOWING THE LOSS CANNOT BE ACCEPTED AS A VALID RETURN. ACCORDINGLY THE LEARNED CIT (A) DENIED TH E CLAIM OF THE ASSESSEE ON TECHNICAL COUNT AS DISCUSSED ABOVE. 4.6 SIMILARLY, THE LEARNED CIT (A) ALSO REJECTED THE CONTENTION OF THE ASSESSEE ON MERIT BY OBSERVING AS UNDER: 4.2.4 CONSIDERING THE ISSUE RAISED ON MERITS, THE APPELLANT HAS STATED THAT IT HAD PLACED DEPOSITS WITH THE MMCB OVER THE YEARS, WHICH WAS CLAIMED AS A LOSS BY IT DURING THE YEAR UNDER CONSIDERATION AS PER THE DIRECTIONS/INSTRUCTIONS OF THE RBI. FIRSTLY, IT IS SEEN THAT THE SAID LETTER OF THE RBI DATED 10 TH APRIL, 2012, IS AN 'ADVISO RY'. SECONDLY, EVEN GOING BY THE SAID LETTER, THE APPELLANT SHOULD HAVE MADE ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 8 - THE SAID PROVISION FOR MMCB IN THE SUBSEQUENT YEAR, POST RECEIVING THE COMMUNICATION FROM RBI, INSTEAD OF FILING A NON EST RETURN OF LOSS BY FILING A REVISED RETURN. 4.2.5 MOREOV ER, A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE AO HAS OBSERVED THAT THE APPELLANT WAS ALREADY CLAIMING THE STATUTORY DEDUCTION U/S 36(1) (VIIA) OF THE ACT ON ACCOUNT OF BAD AND DOUBTFUL DEBTS @ 7.50% OF THE TOTAL INCOME EVERY YEAR. THE APPELLANT HAS IN ITS SUBM ISSION, STATED THAT IT HAS CLAIMED DEDUCTION U/S.36 FOR THE AYS 2008 - 09,2010 - 11 AND 2011 - 12 BUT THAT THE SAME WAS VERY 'NOMINAL'. THE ISSUE HERE IS NOT WHETHER THE DEDUCTION WAS NOMINAL OR NOT. THE ISSUE IS THAT THE APPELLANT WAS ALREADY TAKING THE BENEFIT OF A STATUTORY PROVISION ON ACCOUNT OF ITS DOUBTFUL INVESTMENTS AND THEN CLAIMING THE ENTIRE INVESTMENT MADE IN MMCB AGAIN AS AN 'INHERENT LOSS' WAS NOT JUSTIFIED. FURTHER, THE APPELLANT HAS NOT EXPLAINED ITS UNDERSTANDING OF WHAT AN 'INHERENT LOSS' IS. THE INVESTMENTS IN MMCB WERE MADE FOR THE FIRST TIME IN 2000 - 01. AS FAR BACK AS 2004, THE RBI HAD ISSUED A CIRCULAR ON 21 JULY 2004 TO THE BANKS THAT HAD DEPOSITED MONEY WITH THE MM_CB TO TREAT THEIR DEPOSITS TO THE BANK AS NON - PERFORMING ASSETS AND SUBMIT THE PARTICULARS OF THEIR DEPOSITS TO THE RESERVE BANK. THE APPELLANT HAS NOT GIVEN ANY DETAILS OF THE SAME OR OF ANY COMMUNICATION IN RESPECT OF ITS DEPOSITS WITH MMCB, TO THE RBI. IN FACT, IT HAS BEEN STATED THAT PROVISION WAS MADE FOR MMCB ONL Y PARTIALLY FROM 1.4.2011. THUS THE EXPLANATION OFFERED BY THE APPELLANT FOR HAVIN G CLAIMED THE AMOUNT OF RS.1,56 ,71,108/ - AS BUSINESS LOSS IN AY 2012 - 13, DOES NOT HOLD WATER. 4.2.6 IN VIEW OF THE DISCUSSION ABOVE, I AM OF THE VIEW THAT EVEN ON MERITS, THE APPELLANT'S CLAIM OF LOSS IS NOT ALLOWABLE, AND THE AO WAS JUSTIFIED IN NOT ALLOWING THE SAME AND IN MAKING THE IMPUGNED ADDITION OF RS. 90,96,990/ - . GROUNDS OF APPEAL NOS 1 A ND 3 ARE DISMISSED. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT - A, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1 TO 66 AND SUBMITTED THAT THE RETURN WAS FILED WITHIN THE TIME SPECIFIED UNDER SECTION 139(1) OF THE ACT WHICH WAS SUBSEQUENTLY REVISED FOR CLAIMING THE ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 9 - DEDUCTION ON ACCOUNT OF FDR S WRITTEN OFF AS DISCUSSED ABOVE. AS PER THE LEARNED AR, THERE WAS NO DENIAL UNDER THE PROVISIONS OF SECTION 139(3) OF THE ACT TO REVISE THE RETURN IF AN Y OMISSION/ERROR IS DISCOVERED THEREIN AFTERWARDS. 5.1 THE LEARNED AR ALSO SUBMITTED THAT THE LOSSES ON ACCOUNT OF FDR S WRITTEN OFF WERE ARISING IN THE COURSE OF THE BUSINESS AND THEREFORE THE SAME IS ELIGIBLE FOR DEDUCTION UNDER SECTION 28 OF THE ACT. 5.2 THE LEARNED AR ALSO CLAIMED THAT THE IMPUGNED LOSS WAS WRITTEN OFF IN THE YEAR UNDER CONSIDERATION AS PER THE DIRECTION OF THE RBI. AS SUCH, SUCH LOSS CANNOT BE TREATED AS PRIOR PERIOD EXPENSES/CLAIM. 6. ON THE OTHER HAND, THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BROADLY, TWO ISSUES ARE EMANATING FROM THE ORDER OF THE AUTHORITIES BELOW WHICH ARE AS FOLLOWS: I. WHE THER THE ASSESSEE CAN CLAIM THE LOSSES FOR THE CURRENT YEAR IN THE RETURN REVISED UNDER SECTION 139(5) OF THE ACT. II. WHETHER THE LOSS ON ACCOUNT OF FDR S MAINTAINED WITH MMCBL AND WRITTEN OFF IS ELIGIBLE FOR DEDUCTION UNDER THE HEAD BUSINESS AND PROFESSION. 7.1 FOR DECIDING THE QUESTION NO. 1, WE FIND PERTINENT TO REFER THE PROVISIONS OF SECTION 139(3) OF THE ACT WHICH READS AS UNDER: 59 139. 60 [(1) EVERY PERSON 61 , XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX (3) IF ANY PERSON WHO 81 [***] HAS SUSTAINED A LOSS IN ANY PREVIOUS YEAR UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION OR UNDER THE HEAD CAPITAL GAINS AND CLAIMS THAT THE LOSS OR ANY PART THEREOF SHOULD BE CARRIED FORWARD UNDER SUB - ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 10 - SECTION (1) OF SECTION 72 , OR SUB - SECTION (2) OF SECTION 73 , OR SUB - SECTION (1) 82 [OR SUB - SECTION (3)] OF SECTION 74 , 83 [OR SUB - SECTION (3) OF SECTION 74A ], HE MAY FURNISH, WITHIN THE TIME ALLOWED UNDER SUB - SECTION (1) 84 [***], A RETURN OF LOSS IN THE PRESCRIBED FORM 85 AND VERIFIED IN THE PRESCRIBED MANNER AND CONTAINING SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED, AND ALL THE PROVISIONS OF THIS ACT SHALL APPLY AS IF IT WERE A RETURN UNDER SUB - SECTION (1). 7.2 THE ABOVE PROVISION REVEALS THAT A RETURN FILED UNDER SECTION 139(3) OF THE ACT IS CONSIDERED A R ETURN FILED UNDER SECTION 139(1) OF THE ACT AND ACCORDINGLY ALL THE PROVISIONS OF SUBSECTION (1) OF 139 OF THE ACT SHALL BE APPLIED TO THE RETURN FILED UNDER SECTION 139(3) OF THE ACT. THUS THERE REMAINS NO AMBIGUITY THAT A RETURN FILED UNDER SECTION 139(3 ) OF THE ACT IS CONSIDERED A RETURN FILED UNDER SECTION 139(1) OF THE ACT AND ACCORDINGLY WE HOLD THAT THE SAME CAN BE REVISED UNDER SECTION 139(5) OF THE ACT. 7.3 SIMILARLY, WE ALSO NOTE THAT THERE IS NO SPECIFIC DENIAL UNDER SECTION 80 OF THE ACT THAT THE RETURN FILED UNDER SECTION 139(3) OF THE ACT, WHICH IS CONSIDERED THE RETURN FILED UNDER SECTION 139(1) OF THE ACT, CANNOT BE REVISED UNDER SECTION 139(5) OF THE ACT. THE RELEVANT PROVISIONS OF SECTION 80 OF THE ACT READ AS UNDER: SUBMISSION OF RETUR N FOR LOSSES. 80. NOTWITHSTANDING ANYTHING CONTAINED IN THIS CHAPTER, NO LOSS WHICH HAS NOT BEEN DETERMINED IN PURSUANCE OF A RETURN FILED 27 [IN ACCORDANCE WITH THE PROVISIONS OF SUB - SECTION (3) OF SECTION 139 ], SHALL BE CARRIED FORWARD AND SET OFF UNDER SUB - SECTION (1) OF SECTION 72 OR SUB - SECTI ON (2) OF SECTION 73 OR SUB - SECTION (1) 28 [OR SUB - SECTION (3)] OF SECTION 74 29 [OR SUB - SECTION (3) OF SECTION 74A ]. 7.4 IN VIEW OF THE ABOVE WE CONCLUDE THAT ONCE A RETURN FILED UNDER SECTION 139(3) OF THE ACT HAS BEEN CONSIDERED A RETURN FILED IN THE SECTION 139(1) OF THE ACT WHICH IMPLIES THAT ALL THE PROVISIONS OF SECTION 139 OF THE ACT WILL BE EQUALLY APPLICABLE. IN HOLDING SO WE FIND SUP PORT AND GUIDANCE ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 11 - FROM THE JUDG MENT OF HON BLE HIGH COURT OF GUJARAT IN THE CASE OF PCIT VS. BABUBHAI RAMANBHAI PATEL REPORTED IN 249 TAXMAN 470 WHEREIN IT WAS HELD AS UNDER: 5. WE MAY NOTICE THAT UNDER SUB - SECTION (1) OF SECTION 139, EVERY PERSON WHOSE INCOME FOR THE PREVIOUS YEAR EXCEEDS THE MAXIMUM AMOUNT NOT CHARGEABLE TO TAX, IS REQUIRED TO FILE A RETURN BEFORE THE DUE DATE. SUB - SECTION (3) OF SECTION 139 PROVIDES THAT ANY PERSON W HO HAS SUSTAINED A LOSS AND CLAIMS THAT THE LOSS SHOULD BE CARRIED FORWARD WOULD FILE A RETURN OF LOSS WITHIN THE TIME PRESCRIBED UNDER SUB - SECTION (1) AND THEREUPON ALL THE PROVISIONS OF THE ACT SHALL APPLY AS IF IT WAS A RETURN UNDER SUB - SECTION (1) OF S ECTION 139 OF THE ACT. UNDER SUB - SECTION 4 OF SECTION 139, A PERSON WHO HAS NOT FURNISHED A RETURN WITHIN THE TIME ALLOWED UNDER SUB - SECTION (1) MAY STILL FURNISH A RETURN AT ANY TIME BEFORE THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT WHICHEVER IS EARLIER. SUB - SECTION (5) OF SECTION 139 PROVIDES THAT ANY PERSON HAVING FURNISHED A RETURN UNDER SUB - SECTION (1) OR SUB - SECTION (4) DISCOVERS ANY OMISSION OR A WRONG STATEMENT THEREIN, HE MAY FURNISH A REVISED RETURN ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT WHICHEVER IS EARLIER. 7.5 WE ALSO FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HON BLE HIGH COURT OF MADRAS IN THE CASE OF CIT VERSUS PER IYAR DISTRICT CO - OPERATIVE MILK PRODUCERS UNION LTD. REPORTED IN 266 ITR 705 WHEREIN IT WAS HELD AS UNDER: 7. A BARE PERUSAL OF THE AFORESAID TWO PROVISIONS, MORE PARTICULARLY THE PROVISION CONTAINED IN SECTION 139(3), MAKES IT CLEAR THAT A RETURN OF LOSS FILED UNDER SECTION 139(3) MAY BE FILED WITHIN THE TIME ALLOWED UNDER SECTION 139(1). ONCE SUCH A RETURN IS FILED, ALL THE PROVISIONS OF THE INCOME - TAX ACT SHALL APPLY AS IF SUCH RETURN HAS BEEN FILED UNDER SECTION 139(1). THIS POSITION IS CLEAR FROM THE EXPRESSION '. . . ALL THE PROVISIONS OF THIS ACT SHALL APPLY AS IF IT WERE A RETURN UNDER SUB - SECTION (1)'. IN OTHER WORDS, A RETURN FILED UNDER SECTION 139(3) IS DEEMED TO BE A RETURN FILED UNDER SECTION 139(1). THE PROVISION CONTAINED IN SECTION 139(3) M AKES IT CLEAR THAT ALL THE PROVISIONS OF THIS ACT SHALL APPLY TO SUCH A RETURN AS IF IT WERE A RETURN UNDER SECTION 139(1). IN VIEW OF SUCH A SPECIFIC PROVISION, THERE IS NO REASON TO EXCLUDE THE APPLICABILITY OF SECTION 139(5) TO A RETURN FILED UNDER SECT ION 139(3). ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 12 - IN VIEW OF THE ABOVE WE HOLD THAT THE ASSESSEE CANNOT BE DENIED THE BENEFIT OF THE LOSS TO BE ALLOWED CARRIED FORWARD UNDER THE PROVISIONS OF SUBSECTION 139(3) READ WITH SECTION 80 OF THE ACT IN A SITUATION WHERE THE LOSS WAS CLAIMED IN THE REVISED RETURN OF INCOME. ON THIS TECHNICAL COUNT, THE ASSESSEE SUCCEEDS. 8. NOW COMING TO THE 2 ND QUESTION WHETHER THE ASSESSEE IS ELIGIBLE FOR DEDUCTION FOR THE FDR S WRITTEN OFF AGAINST THE BUSINESS INCOME OF THE ASSESSEE, IN THIS REGARD THAT THE GENUINENESS OF THE LOSS HAS NOT BEEN DOUBTED BY THE AUTHORITIES BELOW. ADMITTEDLY, THE INCOME BY WAY OF INTEREST FROM SUCH FDR S WAS OFFERED TO TAX WHICH WAS ACCEPTED BY THE REVENUE. THUS, ANY LOSS ON ACCOUNT OF FDR S WRITTEN OFF CANNOT BE DENIED MERELY ON THE GROUND THAT THE IMPUGNED INTEREST INCOME WAS OFFERED UNDER THE HEAD INCOME FROM OTHER SOURCES. IN T HIS REGARD WE FIND SUPPORT AND GUIDANCE FROM THE ORDER OF THIS TRIBUNAL IN THE CASE OF JUNAGADH COMMERCIAL CO - OPERATIVE BANK LTD. VS. JCIT IN ITA NO. 70/AHD/2015 FOR THE ASSESSMENT YEAR 2009 - 10 VIDE ORDER DATED 8 NOVEMBER 2017. THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED AS UNDER: 8. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. IT IS AN UNDISPUTED FACT THAT DIE INVESTMENT IN FDR WITH MADHAVPURA CO - OPERATIVE BANK LTD. AMOUNTING TO RS. 47,36,308/ - WAS TREATED AS ELIGIBLE INVESTMENT IN THE EARLIER YEARS. IT IS ALSO TRUE THAT DIE MADHAVPURA CO - OPERATIVE BANK LTD. BECAME SICK AND THE RBI DIRECTED THE ASSESSEE TO WRITE OFF DIE AMOUNT BAD. IT IS EQUALLY TRUE THAT THE ASSESSEE WAS SHOWING INTEREST EARNED FROM FIXED DEPO SIT WITH DIE MADHAVPURA CO - OPERATIVE BANK LTD. AS ITS INCOME IN THE PAST. IN OUR CONSIDERED OPINION, SINCE THE INVESTMENT WAS ACCEPTED AS ELIGIBLE INVESTMENT AND SINCE THE ASSESSEE WAS SHOWING INTEREST INCOME FROM FDR WITH MADHAVPURA CO - OPERATIVE BANK LTD. IN THE PAST, DIE WRITE OFF OF DIE SAME HAS TO BE ALLOWED AS BAD DEBTS. WE ACCORDINGLY SET ASIDE DIE FINDINGS OF THE ID. CIT(A) AND DIRECT THE A.O. TO DELETE THE ADDITION OF RS. 47,36,308/ - . APPEAL FILED BY THE ASSESSEE IS ALLOWED. ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 13 - 8.1 WE ALSO NOTE THAT T HE ACTIVITY OF THE ASSESSEE FOR INVESTING ITS MONEY AS FDR S IS A NORMAL BUSINESS ACTIVITY DESPITE THE INTEREST THEREON IS OFFERED TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES. IN HOLDING SO WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HON BLE APEX COURT IN THE CASE OF BIHAR STATE CO - OPERATIVE BANK LTD. VS. CIT REPORTED IN 39 ITR 114 WHEREIN IT WAS HELD AS UNDER: THE MONEYS LAID OUT IN THE FORM OF DEPOSITS WOULD NOT CEASE TO BE A PART OF THE CIRCULATING CAPITAL OF THE ASSESSEE NOR WOULD THEY CEASE TO FORM PART OF ITS BANKING BUSINESS. THE RETURNS FLOWING FROM THEM WOULD FORM PART OF ITS PROFITS FROM ITS BUSINESS. IN A COMMERCIAL SENSE THE DIRECTORS OF THE COMPANY OWED IT TO THE BANK TO MAKE INVESTMENTS WHICH EARNED THEM INTEREST INSTEAD OF LETTING MONEYS LIE IDLE. IT COULD NOT BE SAID THAT THE FUNDS OF THE BANK WHICH WERE NOT LENT TO BORROWERS BUT WERE LAID OUT IN THE FORM OF DEPOSITS IN ANOTHER BANK TO ADD TO THE PROFIT INSTEAD OF LYING IDLE NECESSARILY CEASED TO BE A PART OF THE STOCK - IN - TRADE OF THE BANK, OR THAT THE INTEREST ARISING THEREFROM DID NOT FORM PART OF ITS BUSINESS PROFITS. UNDER THE BYE - LAWS ONE OF THE OBJECTS OF THE APPELLANT BANK WAS TO CARRY ON THE GENERAL BUSINESS OF BANKING AND THEREFORE, SUBJECT TO THE CO - OPERATIVE SOCIETIES ACT , IT HAD TO CARRY ON ITS BUSINESS IN THE MANNER THAT ORDINARY BANKS DO. 8.2 WE ALSO NOTE THAT THE INVESTMENT WRITTEN OFF BY THE INSURANCE COMPANY WAS ALLOWED AS DEDUCTION TREATING THE SAME AS BUSINESS LOSS. IN THIS REGARD WE FIND SUPPORT AND GUIDANCE FRO M THE ORDER OF DELHI ITAT IN THE CASE OF DCIT VS. ORIENTAL GENERAL INSURANCE COMPANY LTD. REPORTED IN 92 TTJ 300 WHEREIN IT WAS HELD AS UNDER: IN THE INSTANT CASE, THE ENTRIES MADE IN THE ASSESSEE S BOOKS OF ACCOUNT IN THAT BEHALF WERE STRICTLY IN ACCORD ANCE WITH THE GUIDELINES ISSUED BY GENERAL INSURANCE CORPORATION. THOSE GUIDELINES PERMITTED THE ASSESSEE TO BOOK A LOSS WHICH HAD, FOR ALL PRACTICAL PURPOSES, BEEN SUFFERED ON ACCOUNT OF DEPRECIATION IN VALUE OF INVESTMENTS BEYOND ANY REASONABLE HOPE OF R ECOVERY. IN SUCH CIRCUMSTANCES, THE GUIDELINES PERMITTED THE INSURANCE COMPANY TO BOOK THE LOSS IN THE ACCOUNTS RATHER THAN WAITING FOR ACTUAL REALIZATION OF LOSS ON SALE OF INVESTMENT. THUS, THE AMOUNTS CLAIMED BY THE ASSESSEE WERE TO BE UNDERSTOOD AS A L OSS ON INVESTMENTS SUFFERED BY ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 14 - THE ASSESSEE. SUCH LOSS COULD NEITHER BE CONSIDERED AS EXPENDITURE NOR A ALLOWANCE . HENCE, THE ASSESSING OFFICER ERRED IN ADDING BACK THE SAME IN THE COMPUTATION OF ASSESSEE S INCOME CHARGEABLE TO TAX. 8.3 INDEED THE ABOVE JUDGMENT WAS RENDERED IN CONNECTION WITH THE INVESTMENT WRITTEN OFF BY THE INSURANCE COMPANY, BUT TO OUR MIND THE PRINCIPLES LAID DOWN THEREIN CAN BE APPLIED IN THE CASE ON HAND. IN VIEW OF THE ABOVE AND AFTER CONSIDERING THE FACTS IN TOTALITY, WE HOLD THAT THE IMPUGNED LOSS CLAIMED BY THE ASSESSEE IS ALLOWABLE DEDUCTION UNDER THE HEAD BUSINESS AND PROFESSION. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 9. THE 2 ND ISSUE RAISED BY THE ASSESSEE IS THAT LEARNED CIT (A) ERRED IN CONFIRMING THE ORDER OF THE AO BY NOT ALLOWING THE CARRY FORWARD OF THE BUSINESS LOSS TO THE ASSESSMENT YEAR 2006 - 07. 10. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS CARRIED FORWARD THE BUSINESS LOSS OF 2,31,857.00 AND 16,71,665.00 PERTAINING TO THE ASSESSMENT YEAR 2005 - 06 AND 2006 - 07 RESPECTIVELY. HOWEVER THE AO FOUND THAT THE INCOME OF THE ASSESSEE UP TO THE ASSESSME NT YEAR 2006 - 07 WAS NOT SUBJECT TO TAX. AS SUCH THE INCOME UP TO THE ASSESSMENT YEAR 2006 - 07 WAS ALLOWED AS DEDUCTION UNDER SECTION 80P OF THE ACT. ACCORDINGLY THE AO DID NOT ALLOW THE CARRY FORWARD OF THE IMPUGNED LOSS TO BE SET OFF AGAINST THE FUTURE INC OME. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). 11. THE ASSESSEE BEFORE THE LEARNED CIT (A) SUBMITTED THAT THE INCOME OF THE ASSESSEE WAS DEDUCTIBLE UNDER THE PROVISIONS OF SECTION 80P OF THE ACT ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 15 - SUBJECT TO THE FULFILMENT OF THE CON DITIONS. AS SUCH THERE IS A DISTINCTION BETWEEN THE EXEMPTION AND THE DEDUCTION. 11.1 HOWEVER, THE LEARNED CIT (A) DISREGARDED THE CONTENTION OF THE ASSESSEE BY OBSERVING AS UNDER: 5. GROUND OF APPEAL NO.2 IS AGAINST THE ACTION OF THE AO IN NOT ALLOWIN G CARRY F ORWARD AND SET OFF OF LOSS OF RS.2,31,857/ - FOR ASST YEAR 2005 - 06 AND RS.16,71,665/ - FOR ASST. YEAR 2006 - 07 AS CLAIMED BY THE APPELLANT. THE AO HAS GIVEN A VERY CLEAR FINDING FOR THE DISALLOWANCE FOR SET OFF FOR ASST. YEARS 2005 - 06 AND 2006 - 07. IT I S SEEN THAT THE INCOME OF THE APPELLANT, WHICH IS A COOPERATIVE BANK WAS NOT TAXABLE UPTO THE YEAR 2006 - 07 BECAUSE SUCH INCOME WAS DEDUCTIBLE U/S SOP OF THE ACT. THUS THE BUSINESS LOSSES OF AY 2006 - 07 AND EARLIER YEARS CANNOT BE SET OFF AGAINST THE INCOME OF THE SUCCEEDING ASSESSMENT YEARS. THE HON'HLE SUPREME COURT OF INDIA IN THE CASE OF C1T VS. HARPRASAD & CO. (P.) LTD. [1975] 99 ITR 118 (SC) HAS ALSO OBSERVED THAT LOSS FROM A SOURCE WHICH IS NOT TAXABLE CANNOT BE CARRIED FORWARD. IN VIEW OF THE SAME, TH E ACTION OF THE A.O IS CONFIRMED AND GROUND OF F APPEAL NO.2 IS DISMISSED. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE ASSESSEE IS IN APPEAL BEFORE US. 12. THE LEARNED AR BEFORE US SUBMITTED THAT THE IMPUGNED LOSSES WERE BROUGHT FORWARD FRO M THE EARLIER ASSESSMENT YEARS. 13. ON THE OTHER HAND, THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 14. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE P RESENT CASE RELATES WHETHER THE LOSS CAN BE CARRIED FORWARD WITH RESPECT TO THE INCOME IN RESPECT OF WHICH DEDUCTION UNDER SECTION 80P OF THE ACT IS AVAILABLE. ADMITTEDLY, THE ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 16 - ASSESSEE WAS ENTITLED FOR THE DEDUCTION UNDER SECTION 80P OF THE ACT WITH RESPEC T TO ITS INCOME UP TO THE ASSESSMENT YEAR 2006 - 07 AND THE IMPUGNED LOSSES AS DISCUSSED ABOVE PERTAIN THE EARLIER YEARS I.E. 2005 - 06 AND 2006 - 07 WHICH WERE ALLOWED BE CARRIED FORWARD IN THE ASSESSMENTS FRAMED UNDER SECTION 143(3) OF THE ACT FOR THE ASSESSME NT YEARS 2007 - 08, 2009 - 10 AND 20 10 - 11. THE COPIES OF THE ASSESSMENT ORDERS ARE ENCLOSED ON PAGES 57 TO 66 OF THE PAPER BOOK. IN OUR CONSIDERED VIEW, IF ANY LOSS IS NOT BE ALLOWED TO BE CARRIED FORWARD AS DISCUSSED ABOVE, THEN THE REVENUE HAS THE POWER TO D ENY THE CLAIM OF THE ASSESSEE IN THAT VERY YEAR ONLY . IF THE REVENUE HAS OMITTED TO DO SO, THE REMEDY PROVIDED UNDER THE ACT FOR THE REVENUE TO INVOKE THE PROVISIONS OF SECTION 154 OF THE ACT OR 263 OF THE ACT OR 147 OF THE ACT FOR THAT VERY ASSESSMENT YEA R AS THE CASE MAY BE AND DEPENDING UPON THE FACTS AND CIRCUMSTANCES. HOWEVER, THE REVENUE HAS NO REMEDY/POWER TO DISTURB SUCH CLAIM OF THE ASSESSEE IN ANY OTHER ASSESSMENT YEAR. 14.1 IT IS ALSO PERTINENT TO NOTE THAT THERE WERE SEVERAL ASSESSMENTS CARRIED OUT BY THE REVENUE PERTAINING TO THE ASSESSMENT YEARS 2007 - 08, 2009 - 10 AND 2010 - 11 BUT CLAIM OF THE ASSESSEE WAS NOT DISTURBED IN THESE ASSESSMENT YEARS. THUS THE ISSUE IN THE CASE ON HAND HAS REACHED THE FINALITY AND THE SAME CANNOT BE DISTURBED U NTIL AND UNLESS THERE IS A MECHANISM PROVIDED UNDER THE ACT. HENCE, WE HOLD THAT CLAIM FOR THE BROUGHT FORWARD LOSSES FOR THE EARLIER YEARS CANNOT BE DENIED TO THE ASSESSEE IN THE YEAR UNDER CONSIDERATION . THUS THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOW ED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. 15. COMING TO THE ITA NO. 131/RJT/2017 AN APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2013 - 14 THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 17 - 1. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 7, AHMEDABAD ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN NOT ALLOWING SET OFF OF BROUGHT FORWARD LOSSES OF RS.16,47,122/ - AGAINST THE TAXABLE INCOME FOR THE YEAR AND TREATING THE SAME AS EXCESS. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) - 7, AHMEDABAD FAILED TO APPRECIATE THE DISTIN CTION BETWEEN AN EXEMPTION AND A DEDUCTION PROVISION. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER AND WITHDRAW ANY GROUNS OF APPEAL ANYTIME UP TO THE HEARING OF THIS APPEAL. 16. THE SOLITARY ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN NOT ALLOWING THE BROUGHT FORWARD LOSSES OF 16,47,122 TO BE SET OFF AGAINST THE TAXABLE INCOME. 17. AT THE OUTSET, THE LEARNED AR FOR THE ASSESSEE BEFORE US SUBMITTED THAT THE IMPUGNED ISSUE IS DEPENDENT UPON THE GROUND NO. 4 RAISED BY THE ASSESSEE IN ITA NO. 130/RJT/2017 WHICH IS PENDING FOR ADJUDICATION BEFORE THE ITAT. ACCORDINGLY, THE LEARNED AR FOR THE ASSESSEE BEFORE US PRAYED THAT TO GIVE A DIRECTION TO THE AO TO ADJUDICATE THE ISSUE ON H AND CONSIDERING THE OUTCOME OF THE ITA NO. 130/RJT/2017 AS DISCUSSED ABOVE. 18. THE LEARNED DR DID NOT RAISE ANY OBJECTION ON THE SUBMISSION OF THE LEARNED AR FOR THE ASSESSEE. 19. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE RAISED BY THE ASSESSEE IN ITA NO. 130/RJT/2017 HAS ALREADY BEEN ADJUDICATED BY US IN FAVOUR OF THE ASSE SSEE VIDE PARAGRAPH NUMBER 14 OF THIS ORDER. FOR THE DETAILED DISCUSSION, PLEASE REFER THE RELEVANT PARAGRAPH. ACCORDINGLY, WE DIRECT THE AO TO ADJUDICATE THE ITA NO S . 130 - 131 /RJT / 2017 A.Y S . 2012 - 13 & 20 1 3 - 14 - 18 - ISSUE KEEPING IN MIND THE ORDER OF THIS TRIBUNAL AS DISCUSSED ABOVE. HENCE, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED 20. IN THE COMBINED RESUL T, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED . THIS ORDER PRONOUNCED IN OPEN COURT ON 18 / 12 /201 9 - SD - - SD - ( ) ( ) (RAJPAL YADAV) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) DATED 18 /12 /201 9 MANISH