Assistant Commissioner of Income-tax, Raigad V. The Panvel Co-operative Urban Bank Ltd., Raigad

ITA 1957/PUN/2013

• Counselvise Citation: 195724514 RSA 2013
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 07-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.1957/PN/2013 (A.Y:2009-10) ACIT, PANVEL CIRCLE, PANVEL, RAIGAD DIST. APPELLANT VS. THE PANVEL CO-OPERATIVE URBAN BANK LTD., 471 KAPAD BAZAR, TILAK ROAD, PANVEL, DIST. RAIGAD. PAN: AAATP4265A RESPONDENT APPELLANT BY : SHRI P.S. NAIK RESPONDENT BY : SHRI KISHORE PHADKE DATE OF HEARING : 24.09.2014 DATE OF PRONOUNCEMENT : 24.09.2014 ORDER PER SHAILENDRA KUMAR YADAV : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, THANE DATED 09.08.2013 FOR A.Y. 2009-10 ON THE FOLLOWING GROUNDS. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW THE LD. CIT(A)-I, THANE HAS ERRED IN ALLOWING SET OFF O F BROUGHT FORWARD LOSS OF A.Y. 2004-05, OVERLOOKING THE FACT THAT THE ASSESSEE HAD NOT CLAIMED SET OFF OF LOSS OF A.Y. 20 04-05 IN SUBSEQUENT RETURNS FILED FOR A.YRS. 2007-08 & 2008- 09 AND FURTHER IGNORING THE FACT THAT THE ASSESSMENT U/S 1 43(3) HAS BEEN COMPLETED IN RESPECT OF A.Y.2007-08 & 2008 -09, FOR WHICH NO APPEAL HAS BEEN FILED BY THE ASSESSEE. ITA NO.1957/PN/13 THE PANVEL CO-OP. URBAN BANK LTD 2. THE APPELLANT PRAYS THE ORDER OF THE LD.CIT(A)-I, T HANE MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RES TORED. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER A NY GROUND/GROUNDS, WHICH MAY BE NECESSARY. 2. THE ASSESSEE IS A CO-OPERATIVE BANK ENGAGED IN T HE BANKING ACTIVITY AT PANVEL. THE ASSESSEE HAD FURNISHED THE FOLLOWING TABLE BEFORE THE ASSESSING OFFICER FOR CLAIMING SET OFF O F BROUGHT FORWARD LOSSES. A.Y. LOSS CLAIMED IN A.Y. 2009-10 LOSS ALLOWED IN THIS ASSESSMENT REMARKS / REASONS FOR DECISION 2003-04 RS.30,60,752/- NIL ASSESSED U/S. 143(3). PETITION U /S.264 REJECTED BY CIT ON 15. 12. 2011. 2004-05 RS.66,16,039/- NIL NO ASSESSMENT U/S. 143(3) 2005-06 RS.21, 70,374/- NIL AS PER ORDER U/S. 143(3) FOR A.Y. 2007- 08 DT. 21.12.2009, PARTLY ADJUSTED OUT OF TOTAL LOSS RS.21,70,374/- 2006-07 RS.13,72,780/- NIL AS PER ORDER U/S. 143(3) FOR A.Y. 2007-08 DT. 21.12.2009. PARTLY ADJUSTED OUT OF TOTAL LOSS RS.24,23,083/- 2007-08 RS.23,00,308/- NIL AS PER ORDER U/S. 143(3) FOR A.Y. 2007- 08 DT. 21.12.2009. RS.19,33,492/- ADJUSTED 2008-09 RS. 36,65,212/- NIL EARLI ER YEARS LOSSES FULLY ADJUSTED OF RS. 16,34,200/- , RESULTING INTO TAXABLE INCOME OF RS.20,31,012/- . INSTEAD NIL AS CLAIMED IN ROI FILED ON 27.09.2008 2009-10 RS.72,54,425/- NIL NO EARLIER YEAR LOSS REMAINED TO BE ADJUSTED THEREFORE, RETURN INCOME TAKEN AT RS. 2,07,09,376/-. 2.1 THE ASSESSING OFFICER DID NOT ALLOW SET OFF OF BROUGHT FORWARD LOSSES TO THE ASSESSEE FOR A.Y. 2003-04 & A.Y. 2004-05. THE STAND OF THE ASSESSEE IN THIS REGARD HAS BEEN THAT IT HAD FILED ITS RETURN OF INCOME FOR A.Y. 2003-04 AT A LOSS OF RS.6 2,26,650/-. IN THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT FOR THAT YEAR, AN ADDITION OF RS.31,45,897/- WAS MADE BY THE ASSES SING OFFICER AND THE LOSS FOR THE ASSESSMENT YEAR 2003-04 WAS AS SESSED AT RS. ITA NO.1957/PN/13 THE PANVEL CO-OP. URBAN BANK LTD 30,80,752/-. THEREFORE, THE AMOUNT OF RS.30,80,752 /- WAS AVAILABLE TO THE ASSESSEE PERTAINING TO THE ASSESSM ENT YEAR 2003- 04 FOR SETTING OFF IN THE SUBSEQUENT YEARS. FURTHE R, THE ASSESSEE HAD FILED REVISION PETITION BEFORE THE CIT-II, THAN E U/S.264 OF THE ACT AGAINST THE ADDITION OF RS.31,45,897/- MADE BY THE ASSESSING OFFICER. THE CONCERNED CIT REJECTED THE ASSESSEE'S PETITION U/S.264 OF THE ACT. THEREFORE, EVEN AFTER REJECTION OF THE PETITION OF THE ASSESSEE, THE AMOUNT OF RS.30,80,752/- WAS STILL AV AILABLE TO THE ASSESSEE PERTAINING TO A.Y. 2003-04 FOR SETTING OFF AGAINST PROFITS OF THE SUBSEQUENT YEARS. 2.2 WITH REGARD TO A.Y. 2004-05, IT WAS SUBMITTED T HAT THE RETURN OF INCOME FOR A.Y. 2004-05 WAS FILED ON 25.10.2004 CLAIMING LOSS OF RS.66,16,039/-. THE ASSESSING OFFICER HAS NOT ALLO WED THE SET OFF OF THIS LOSS BY OBSERVING THAT THE ASSESSMENT FOR T HIS ASSESSMENT YEAR WAS MADE U/S.143(1) OF THE ACT ONLY AND NO ASS ESSMENT U/S. 143(3) OF THE ACT WAS MADE. THE ASSESSEE'S SUBMISS IONS WERE FORWARDED TO THE ASSESSING OFFICER FOR HIS COMMENTS . THE ASSESSING OFFICER VIDE HIS REPORT DATED 30.05.2013 MADE FOLLOWING OBSERVATIONS WITH REGARD TO BROUGHT FORWARD LOSSES OF TWO YEARS. 1) A.Y. 2003-04 THE LOSS DETERMINED FOR THIS YEA R U/S.143(3)- THE CASE WAS SCRUTINIZED AND THE ASSESSEE IS ENTITL ED TO HAVE CARRY FORWARD THE LOSS OF RS.30,80,752/-. 2) A.Y. 2004-05- FOR THIS YEAR, THE LOSS WAS DETERMINED U/S. 143(1). THE A.O. IN HIS REPORT: HAS SUBMITTED THAT THE. APPELLA NT HAD NOT CLAIMED LOSS FOR A.Y. 2004-05 IN THE SUBSEQUENT RETURNS. THEREFORE, IT WAS NOT ENTITLED TO CARRY FO RWARD THE LOSS FOR THE ASSESSMENT YEAR 2004-05. ITA NO.1957/PN/13 THE PANVEL CO-OP. URBAN BANK LTD 2.3 THE ASSESSEE IN RESPONSE TO THE ASSESSING OFFIC ER'S REPORT FILED HIS REJOINDER DATED 25.06.2013. WITH REGARD TO THE ASSESSING OFFICER'S OBJECTION FOR SETTING OFF BROUGHT FORWARD LOSSES PERTAINING TO A.Y. 2004-05, IT WAS SUBMITTED THAT KEY CONTENTI ON OF THE ASSESSEE AS TO FILING OF LOSS RETURN FOR A.Y. 2004- 05 WAS CONFIRMED AND CORROBORATED BY THE ASSESSING OFFICER'S OBSERVA TION THAT LOSS OF RS.66,16,039/- WAS ASSESSED FOR THIS YEAR U /S. 143(1) OF THE ACT. THE ASSESSING OFFICERS OBJECTION THAT LOSS P ERTAINING TO A.Y. 2004-05 HAD NOT BEEN CLAIMED BY THE ASSESSEE IN THE SUBSEQUENT YEARS I.E. A.Y. 2007-08 & 2008-09 AND THEREFORE WAS NOT AVAILABLE TO THE ASSESSEE FOR SETTING OFF IN THE ASSESSMENT Y EAR 2009-10, WAS NOT LEGALLY CORRECT BECAUSE AS PER SECTION 72 OF TH E ACT, LOSS FOR A PARTICULAR YEAR WAS ALWAYS AVAILABLE FOR SET OFF IN THE SUCCEEDING YEARS, WHETHER CLAIMED IN THE RETURNS OF SUCH NEXT YEARS OR NOT. THE PROVISIONS OF SECTION 72 OF THE ACT DO NOT REQU IRE THE RETURNS OF THE SUBSEQUENT YEARS TO INCLUDE THE AMOUNT OF LOSS OF EARLIER YEARS FOR ITS ELIGIBILITY AS TO SET OFF IN SUBSEQUE NT YEARS. ALL THAT IS STIPULATED IS THAT THE ASSESSEE SHOULD MAKE SET OFF FOR THE YEAR OF PROFIT / INCOME AND THAT SUCH YEARS SPAN CANNOT BE MORE THAN 8 YEARS. THEREFORE, NON-MENTION OF LOSS FOR A.Y. 200 4-05 IN THE SUBSEQUENT YEARS I.E. A.Y. 2007-08 AND 2008-09 DOES NOT INVALIDATE ITS CLAIM OF SET OFF FOR A.Y. 2009-10. 2.4 THE ASSESSEE IN THIS REGARD RELIED ON THE DECIS ION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. MAHALAXMI SUGA R MILLS CO. LTD. 27 TAXMAN 267, WHEREIN IT WAS HELD THAT 'THERE IS A DUTY CAST ON THE INCOME-TAX OFFICER TO APPLY THE RELEVANT PROVISIONS OF THE INDIAN INCOME-TAX ACT FO R THE PURPOSE OF DETERMINING THE TRUE FIGURE OF THE ASSES SEE'S TAXABLE INCOME AND THE CONSEQUENTIAL TAX LIABILITY. THAT THE ASSESSEE FAILS TO CLAIM THE BENEFIT OF A SET OFF CA NNOT RELIEVE THE INCOME-TAX OFFICER TO HIS DUTY TO APPLY SECTION 24 IN AN APPROPRIATE CASE'. ITA NO.1957/PN/13 THE PANVEL CO-OP. URBAN BANK LTD 2.5 THE CIT(A) HAVING CONSIDERED THE FACTS BEFORE H IM HAS OBSERVED THAT IN THE ASSESSMENT ORDER, THE ASSESSIN G OFFICER HAD NOT ALLOWED SET OFF OF BROUGHT FORWARD LOSSES F OR THE ASSESSMENT YEAR 2003-04 & 2004-05. AS FAR AS A.Y. 2003-04 IS CONCERNED, THE ASSESSING OFFICER IN THE REMAND REPO RT HAS CONSIDERED THAT THE ASSESSEE WAS ENTITLED TO CARRY FORWARD A LOSS OF RS.30,80,752/- FOR THIS ASSESSMENT YEAR WHICH WAS D ETERMINED U/S.143(3) TO SUBSEQUENT YEARS. THEREFORE, THE ASS ESSEE WAS FOUND ENTITLED TO CLAIM SET OFF OF THIS LOSS FOR THE YEAR UNDER CONSIDERATION I.E. A.Y. 2009-10. WITH REGARD TO A.Y. 2004-05, IT WAS FOUND THAT IN THE REMAND REPORT, THE ASSESSING OFFICER HAS OBS ERVED THAT LOSS OF RS.66,16,039/- WAS DETERMINED U/S.143(1) OF THE ACT. THE REASONS GIVEN BY THE ASSESSING OFFICER FOR NOT ALLO WING SET OFF OF THIS BROUGHT FORWARD LOSS TO THE ASSESSEE WAS THAT THE ASSESSEE HAD NOT CLAIMED LOSS OF A.Y. 2004-05 IN THE SUBSEQU ENT ASSESSMENT YEARS I.E. A.Y. 2007-08 & 2008-09, THE O RDERS FOR WHICH WERE PASSED U/S.143(3) OF THE ACT AND HAD BEC OME FINAL AS NO APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINS T THOSE ORDERS. 2.6 THE CIT(A) RIGHTLY DID NOT AGREE WITH THE OBSER VATION OF THE ASSESSING OFFICER AND HE OBSERVED THAT THERE WAS NO DISPUTE REGARDING THE DETERMINATION OF LOSS OF RS.66,16,039 /- FOR A.Y. 2004-05. THE SAME COULD NOT BE DISALLOWED FOR SET OFF ONLY ON THE GROUND THAT THE SAME WAS NOT CLAIMED IN THE RETURNS OF THE ASSESSMENT YEAR 2007-08 & 2008-09. THE ASSESSEE DI D CLAIM THIS LOSS IN THE CURRENT ASSESSMENT YEAR 2009-10, WHICH IS WITHIN 8 YEARS OF THE A.Y. 2004-05. THEREFORE, AS PER THE P ROVISIONS OF THE ACT, THE BUSINESS LOSS, WHICH WAS DULY DETERMINED U NDER THE PROVISIONS OF THE ACT, SHOULD HAVE BEEN ALLOWED TO THE ASSESSEE FOR SET OFF AGAINST THE PROFIT OF THE YEAR UNDER CONSID ERATION. THE ASSESSING OFFICER WAS, THEREFORE, DIRECTED TO ALLOW SET OFF OF BROUGHT FORWARD LOSSES OF THE ASSESSMENT YEAR 2003-04 & 200 4-05 AS ITA NO.1957/PN/13 THE PANVEL CO-OP. URBAN BANK LTD DISCUSSED ABOVE. FURTHER, IT WAS OBSERVED BY THE CIT(A) THAT THE ASSESSEE ITSELF HAD CLAIMED THE TOTAL SET OFF OF RS .73,24,743/- ON ACCOUNT OF BROUGHT FORWARD LOSS AFTER TAKING INTO A CCOUNT UNABSORBED CARRIED FORWARD LOSSES, THE SET OFF COUL D BE RESTRICTED TO THAT AMOUNT ONLY. THIS REASONED FACTUAL AND LEGAL FINDING OF CIT(A) WHEREBY HE HAS RIGHTLY ALLOWED THE SET OFF OF BROUG HT FORWARD LOSSES AS DISCUSSED ABOVE, NEEDS NO INTERFERENCE FR OM OUR SIDE. WE UPHOLD THE SAME. 3. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED AS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS THE 24 TH DAY OF SEPTEMBER, 2014. SD/- SD/- (G.S. PANNU) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED THE 24 TH SEPTEMBER, 2014 GCVSR COPY TO:- 1) THE DEPARTMENT 2) ASSESSEE 3) THE CIT(A)-I, THANE 4) THE CIT-I, THANE 5) THE DR, B BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, PUNE.