K.M.VASHANTHI, COIMBATORE V. ITO WARD 2(5), TIRUPPUR

ITA 3005/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7374 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 02-11-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C YAMUNA
• Keywords: Depreciation; Salary income; Unabsorbed depreciation
• Section: 143(1)

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . , BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A. NO.3005/CHNY/2018 /ASSESSMENT YEAR: 2013-14 SMT. K.M. VASHANTHI, 38, TRICHY ROAD, PALLADAM, COIMBATORE 641 664. [PAN:ABWPV3606Q] VS. THE INCOME TAX OFFICER, WARD 2(5), TIRUPPUR. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : NONE / RESPONDENT BY : MS. C. YAMUNA, JCIT / DATE OF HEARING : 29.04.2019 /DATE OF PRONOUNCEMENT : 30.04.2019 / O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 3, COIMBATORE, DATED 28.08.2018 RELEVANT TO THE ASSESSMENT YEAR 2013-14. THE ONLY EFFECTIVE GROUND RAISED BY THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF .6,00,000/- UNDER SECTION 71(2A) OF THE INCOME TAX ACT, 1961 [ACT IN SHORT] IN RESPECT OF UNABSORBED DEPRECIATION LOSS SET OFF AGAINST THE SALARY INCOME. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON I.T.A. NO. 3005/CHNY/18 2 04.08.2013 FOR THE ASSESSMENT YEAR 2013-14 DECLARING TOTAL INCOME AT NIL. THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY. ON VERIFICATION OF THE MATERIALS FURNISHED BY THE ASSESSEE AGAINST STATUTORY NOTICES, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD SET OFF CARRY FORWARD BUSINESS LOSS AGAINST THE INCOME UNDER THE HEAD SALARY TO THE TUNE OF .6,00,000/-. SINCE THE SET OFF OF BUSINESS LOSS AGAINST SALARY INCOME IS NOT PERMISSIBLE UNDER SECTION 71(2A) OF THE ACT, THE ASSESSING OFFICER DISALLOWED THE SAME AND BROUGHT TO TAX. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE FACTS OF THE CASE AND SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) CONFIRMED THE DISALLOWANCE. 3. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. WHEN THE APPEAL WAS TAKEN UP FOR HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT PETITION FILED. HENCE, WE PROCEED TO DECIDE THE ISSUE ON MERITS AFTER HEARING THE LD. DR. 4. WE HAVE HEARD THE LD. DR, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN THIS CASE, THE ASSESSEE CLAIMED SET OFF OF CARRY FORWARD BUSINESS LOSS AGAINST THE INCOME UNDER THE HEAD SALARY TO THE TUNE OF .6,00,000/-. THE ASSESSING OFFICER OBSERVED THAT UNDER THE PROVISIONS OF SECTION 71(2A) OF THE ACT, SET OFF OF BUSINESS LOSS I.T.A. NO. 3005/CHNY/18 3 AGAINST SALARY INCOME IS NOT PERMISSIBLE. THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) THAT THE PROVISIONS OF SECTION 71(2A) OF THE ACT DEALS WITH BUSINESS LOSS AND NOT UNABSORBED DEPRECIATION LOSS AND IT WAS ARGUED THAT THE CARRY FORWARD OF UNABSORBED DEPRECIATION IS GUIDED BY SECTION 32(2) OF THE ACT AND RELIED ON VARIOUS DECISIONS. HOWEVER, THE LD. CIT(A) OBSERVED THAT THE JUDICIAL PRECEDENCE CLAIMED BY THE ASSESSEE IS NOT RELEVANT. HE FURTHER OBSERVED THAT THE ARGUMENT OF THE ASSESSEE THAT THE SET OFF OF CARRY FORWARD OF UNABSORBED DEPRECIATION IS GUIDED BY SECTION 32(2) OF THE ACT IS ALSO NOT CORRECT. SINCE THE DEPRECIATION LOSS AND BUSINESS LOSS ARE THE OUTCOME WHEN THE INCOME FROM PROVIDE AND GAINS OF THE BUSINESS OR PROFESSION ARE COMPUTED, THE LD. CIT(A) HELD THAT AS PER SECTION 71(2A) OF THE ACT, THE NET LOSS ARISING WHEN INCOME FROM THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION CANNOT BE SET OFF AGAINST THE INCOME FROM SALARY. WE HAVE PERUSED THE RELEVANT PROVISION OF SECTION 71(2A) OF THE ACT AND THE SAME IS REPRODUCED AS UNDER: (2A) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECTION (1) OR SUB- SECTION (2), WHERE IN RESPECT OF ANY ASSESSMENT YEAR, THE NET RESULT OF THE COMPUTATION UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION IS A LOSS AND THE ASSESSEE HAS INCOME ASSESSABLE UNDER THE HEAD SALARIES, THE ASSESSEE SHALL NOT BE ENTITLED TO HAVE SUCH LOSS SET OFF AGAINST SUCH INCOME. FROM THE ABOVE PROVISION OF SECTION 71(2A) OF THE ACT, IT IS VERY CLEAR THAT THE SET OFF OF BUSINESS LOSS AGAINST SALARY INCOME IS NOT PERMISSIBLE, WE ARE OF THE CONSIDERED OPINION THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER I.T.A. NO. 3005/CHNY/18 4 WAS RIGHTLY CONFIRMED BY THE LD. CIT(A) AND THUS, WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A). ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THE 30 TH APRIL, 2019 IN CHENNAI. SD/ - SD/ - (INTURI RAMA RAO) ACCOUNTANT MEMBER (DUVVURU RL REDDY) JUDICIAL MEMBER CHENNAI, DATED, 30.04.2019 VM/- /COPY TO: 1. / APPELLANT, 2. / RESPONDENT, 3. ( ) /CIT(A), 4. /CIT, 5. /DR & 6. /GF.