Sri. Chacko Antony, Kottayam V. The ACIT, Kottayam

ITA 197/COCH/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7695 (ITAT-COCHIN)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 22-04-2016
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Assessee Lawyers: THOMAS CHERIAN F
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3); 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 197 /COCH/201 6 ASSESSMENT YEAR : 2007 - 08 SHRI CHACKO ANTONY, HOTEL BLUE STAR, OPP. FIRE STATION, CHANGANACHERRY. [PAN: ABNPA 1946R] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1, THIRUVALLA, KOTTAYAM. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) ASSESSEE BY SHRI THOMAS CHERIAN, F CA REVENUE BY SHRI A. DHANARAJ, SR.DR DATE OF HEARING 21 / 0 9 / 201 6 DATE OF PRONOUNCEMENT 22/ / 0 9 /201 6 O R D E R PER B.P. JAIN, ACCOUNTANT MEMBER: THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDE R OF THE LD. CIT(A), KOTTAYAM DATED 01/03/2016 FOR THE ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL:- 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPE ALS), KOTTAYAM IS ERRONEOUS NOT ONLY IN LAW, BUT ALSO ON FACTS AND CI RCUMSTANCES OF THE CASE IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF APPELLA NT. 2. THE COMMISSIONER OF INCOME TAX(APPEALS) ERRED I N DISMISSING THE APPEAL, IN SPITE OF THE FACTS, VARIOUS CASE LAWS AND SUBMIS SIONS FILED BY THE APPELLANT, CONFIRMING THE FINDINGS OF THE ASSESSING OFFICER WH ICH IS CONTRADICTORY TO LAW I.T.A. NO.197/COCH/2016 2 AND FACTS OF THE CASE AND THERE FOR THE DISALLOWANC E OF SET OFF OF CARRY FORWARD BUSINESS LOSS OF RS.6,76,410/- IS TO BE CANCELLED. 3. AS PER SECTION 72 OF THE INCOME TAX ACT 1961, (1) WHERE FOR ANY ASSESSMENT YEAR, THE NET RESULT OF TH E COMPUTATION UNDER THE HEAD PROFIT AND GAINS OF BUSINESS OR PROFESSIO N IS A LOSS TO THE ASSESSEE, NOT BEING A LOSS SUSTAINED IN A SPECULATI ON BUSINESS, AND SUCH LOSS CANNOT BE OR IS NOT WHOLLY SET OFF AGAINST INCOME U NDER ANY HEAD OF INCOME IN ACCORDANCE WITH THE PROVISIONS OF SECTION 71, SO MU CH OF THE LOS AS HAS NOT BEEN SO SET OFF OR, WHERE HE HAS NO INCOME UNDER AN Y OTHER HEAD, THE WHOLE LOSS SHALL, SUBJECT TO THE OTHER PROVISIONS OF THIS CHAPTER, BE CARRIED FORWARD TO THE FOLLOWING ASSESSMENT YEAR, AND- (I) IT SHALL BE SET OFF AGAINST THE PROFITS AND GAI NS, IF ANY, OF ANY BUSINESS OR PROFESSION CARRIED ON BY HIM AND ASSESSABLE FOR THA T ASSESSMENT YEAR; (II) IF THE LOSS CANNOT BE WHOLLY SO SET OFF, THE A MOUNT OF LOSS NOT SO SET OFF SHALL BE CARRIED FORWARD TO THE FOLLOWING ASSESSMEN T YEAR AND SO ON (2) WHERE ANY ALLOWANCE OR PART THEREOF IS, UNDER SUB-S ECTION(2) OF SECTION 32 OR SUB-SECTION (4) OF SECTION 35, TO BE CARRIED FOR WARD, EFFECT SHALL FIRST BE GIVEN TO THE PROVISIONS OF THIS SECTION. (3) NO LOSS SHALL BE CARRIED FORWARD UNDER THIS SECTIO N FOR MORE THAN EIGHT ASSESSMENT YEARS IMMEDIATELY SUCCEEDING THE ASSESSM ENT YEAR FOR WHICH THE LOSS WAS FIRST COMPUTED. HERE ALL THE CONDITIONS OF SECTION 72 HAS BEEN SATI SFIED IN MY CASE. 4. THE COMMISSIONER OF INCOME TAX(APPEALS) IS ALS O WRONG IN CONFIRMING THE VIEW OF THE ASSESSING OFFICER, THAT THE ASSETS ARE NOT PUT TO USE. IN VIEW OF THE ABOVE AND OTHER GROUNDS WHICH MAY BE FORWARDED AT THE TIME OF HEARING OF THE APPEAL, THIS APPEAL MAY BE ALLOWED A ND JUSTICE RENDERED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SMENT IN THE PRESENT CASE WAS MADE U/S. 143(3) OF THE ACT ON 28/12/2009 DETERMINI NG THE TOTAL INCOME AT RS.8,18,280/- AND AGRICULTURAL INCOME AT RS.42,300/ -RAISING A DEMAND OF RS.2,67,034/-. THE ASSESSEE FILED AN APPLICATION F OR RECTIFICATION ON 25/02/2010 I.T.A. NO.197/COCH/2016 3 STATING THAT THE ASSESSMENT U/S. 143(3) FOR THE ASS ESSMENT YEAR 2007-08 WAS COMPLETED WITHOUT CONSIDERING THE CARRY FORWARD BUS INESS LOSS FOR THE ASSESSMENT YEAR 2003-04. IN FACT, THE ASSESSING OFFICER DID N OT ADJUST THE CARRY FORWARD LOSS. AGGRIEVED BY THIS ACTION OF THE ASSESSING OFFICER, THE ASSESSEE FILED THE APPEAL BEFORE THE LD. CIT(A). HOWEVER, THE LD. CIT(A) CONF IRMED THE ACTION OF THE ASSESSING OFFICER. 4. I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE ASSESSEE FILED THE LOSS RETURN FOR THE ASSESSMENT Y EAR 2003-04 ON 28/11/2003 ON OR BEFORE THE DUE DATE OF THE FILING OF THE RETURN. T HIS FACT HAS NOT BEEN CONTROVERTED BY THE LD. DR WITH ANY DOCUMENTARY EVIDENCE. FOR T HE ASSESSMENT YEAR 2003-04, THE ASSESSEE CLAIMED BUSINESS LOSS OF RS.12,15,200/ - AND UNABSORBED DEPRECIATION OF RS.1,64,794/-. THE ASSESSEE DID NOT SET OFF THE SE AGAINST THE INCOME FOR THE ASSESSMENT YEARS 2004-05, 2005-06 AND 2006-07 THOUG H IT WAS HAVING POSITIVE INCOME IN THE RESPECTIVE YEARS. FOR THE ASSESSMENT YEAR 2007-08, THE ASSESSEE CLAIMED LOSS. THE ISSUE IN THE PRESENT APPEAL IS D IRECTLY COVERED BY THE DECISION OF THE ITAT, JAIPUR BENCH IN THE CASE OF M/S. RAJASTHA N EXPLOSIVES LTD. VS. THE JCIT REPORTED IN 2016 (3) TMI 1013 ITAT JAIPUR WHERE I T HAS BEEN HELD AS UNDER: DISALLOWANCE OF CARRY FORWARD OF LOSS HELD THAT SINCE NO CLAIM OF SET OFF OF LOS IS MADE BY THE ASSESSEE IN THIS YEAR THE ACTION OF ASSESSING OFFICER IN REJECTING TO ALLOW CARRY FORWARDED IS NOT TENABLE A S IT PREEMPTS THE FUTURE QUASI- JUDICIAL POWERS OF THE ASSESSING OFFICER WHO HAS TO ACTUALLY SET OFF OF THE LOSS IF AND WHEN THERE ARE PROFITS. THEREFORE, THE REMARKS /FINDINGS OF THE LD. ASSESSING OFFICER DENYING CLAIM OF CARRYOVER OF EARLIER LOSSE S AND UNABSORBED DEPRECIATION I.T.A. NO.197/COCH/2016 4 ARE EXPUNGED. THE LEGALITY OF CLAIM OF SET OFF WIL L BE CONSIDERED BY ASSESSING OFFICER WHO WILL DEAL WITH THE ASPECT OF SET OFF. S EE MANMOHAN DAS (1965) (11) TMI 33 SUPREME COURT). THUS THE GROUNDS OF THE ASS ESSEE TO THIS EXTENT ARE ALLOWED. 5. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, TH E SET OFF OF BUSINESS LOSS AND THAT OF THE UNABSORBED DEPRECIATION HAS TO BE ALLOWED BY THE ASSESSING OFFICER AND THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. THUS AL L THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I.T.A. NO. 197/COCH/2016 IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 22-09-2016 SD/- (B.P. JAIN) ACCOUNTANT MEMBER PLACE: KOCHI DATED: 22 ND SEPTEMBER, 2016 GJ COPY TO: 1. SHRI CHACKO ANTONY, HOTEL BLUE STAR, OPP. FIRE S TATION, CHANGANACHERRY. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -1, THIRUVALLA, KOTTAYAM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS),KOTTAYAM . 4. THE PRINCIPAL COMMISSIONER OF INCOME-TAX, KOTTAY AM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR ) I.T.A.T., COCHIN I.T.A. NO.197/COCH/2016 5