Appeal Details
Counselvise Citation
[2020] 110 COUNSELVISE.COM (IT) 1123 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
9 month(s) 6 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
18-12-2020
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
B
Assessment Year
2015-2016
Appeal Filed On
12-03-2020
Judgement Text
ITA NO. 304/KOL/2020 ASS ESSMENT YEAR: 2015-2016 INFINITY INFOTECH PARKS LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA [VIRTUAL COURT HEARING] BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT & SHRI A.T. VARKEY, JUDICIAL MEMBER I.T.A. NO. 304/KOL/2020 ASSESSMENT YEAR: 2015-2016 INFINITY INFOTECH PARKS LIMITED,.......... ............. APPELLANT PLOT A3, BLOCK-GP, SECTOR-V, SALT LAKE, KOLKATA-700091 [PAN:AABCI0692J] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................. ...................... RESPONDENT CIRCLE-2(1), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069 APPEARANCES BY: SHRI AKKAL DHUDHEWALA, A.R., APPEARED ON BEHALF OF THE ASSESSEE SHRI IMOKABA JAMIR, CIT , APPEARED ON BEHALF OF THE REVENUE DATE OF CONCLUDING THE HEARING : OCTOBER 15, 2020 DATE OF PRONOUNCING THE ORDER : DECEMBER 18, 2020 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. PRINCIPAL COMMISSIONER OF INCOME TAX-1, KOLKATA DAT ED 04.02.2020 PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 196 1 . 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF DEVELOPMENT OF I.T. PARKS AND RELAT ED INFRASTRUCTURAL FACILITIES. IN THE ASSESSMENT COMPLETED UNDER SECTI ON 143(3) OF THE ACT VIDE AN ORDER DATED 18.12.2017, THE TOTAL INCOME OF THE ASSESSEE WAS ITA NO. 304/KOL/2020 ASS ESSMENT YEAR: 2015-2016 INFINITY INFOTECH PARKS LIMITED 2 DETERMINED BY THE ASSESSING OFFICER AS PER THE NORM AL PROVISIONS OF THE ACT AT RS. NIL AFTER ALLOWING SET OFF FOR THE UNABS ORBED DEPRECIATION AND BROUGHT FORWARD LOSSES OF THE EARLIER YEARS INCLUDI NG THE BROUGHT FORWARD BUSINESS LOSS OF RS.3,99,13,429/- PERTAINING TO A.Y . 2009-10. THE BOOK PROFIT OF THE ASSESSEE-COMPANY UNDER SECTION 115JB OF THE ACT WAS COMPUTED BY THE ASSESSING OFFICER AT RS.2,57,78,146 /- AS DECLARED IN THE RETURN OF INCOME. THE RECORD OF THE ASSESSMENT COMP LETED BY THE ASSESSING OFFICER WAS EXAMINED BY THE CONCERNED LD. PRINCIPAL CIT AND ON SUCH EXAMINATION, HE FOUND THAT A LOSS OF RS.19,10, 76,892/- WAS DECLARED BY THE ASSESSEE-COMPANY IN ITS RETURN OF INCOME FOR A.Y. 2009-10 INCLUDING THE UNABSORBED DEPRECIATION OF RS.15,11,6 3,463/- AND IN THE ASSESSMENT COMPLETED UNDER SECTION 147/143(3) OF TH E ACT VIDE AN ORDER DATED 19.03.2016, THE CLAIM OF THE ASSESSEE FOR UNA BSORBED DEPRECIATION WAS DISALLOWED BY THE ASSESSING OFFICER TO THE EXTE NT OF RS.8,43,55,803/- THEREBY DETERMINING THE LOSS OF THE ASSESSEE-COMPAN Y FOR A.Y. 2009-10 AT RS.10,67,21,089/-. HE ALSO NOTED THAT THE LOSS SO D ETERMINED FOR A.Y. 2009-10 WAS FULLY SET OFF AGAINST THE INCOME OF THE ASSESSEE FOR A.Y. 2011-12 AND 2012-13 AND THERE WAS NO LOSS FOR A.Y. 2009-10 THAT WAS AVAILABLE TO BE CARRIED FORWARD AND SET OFF AGAINST THE INCOME OF THE ASSESSEE FOR A.Y. 2014-15. HE ACCORDINGLY FOUND THA T THE ORDER PASSED BY THE ASSESSING OFFICER FOR A.Y. 2015-16 UNDER SECTIO N 143(3) ALLOWING THE SET OFF OF BUSINESS LOSS FOR A.Y. 2009-10 AMOUNTING TO RS.3,99,13,429/- WAS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERES T OF THE REVENUE. A SHOW-CAUSE NOTICE WAS ACCORDINGLY ISSUED BY HIM TO THE ASSESSEE UNDER SECTION 263 AND IN REPLY TO THE SAME, THE FOLLOWING SUBMISSION IN WRITING WAS MADE BY THE ASSESESE ON 09.01.2020:- WE ARE IN RECEIPT OF THE NOTICES DATED 27.11.2019 AND 03.01.2020 INFORMING US THAT IN YOUR OPINION ASSESS MENT ORDER U/ S 143(3) FOR AY 2015-16 WAS ERRONEOUS IN S O FAR, AS IT WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IT IS CLAIMED IN THE SCN THAT IN ARRIVING AT THE ASSESSED INCOME FOR THE AY 2015-16 THE AO WRONGLY ALLOWED SET-OFF FOR BROUGHT FORWARD BUSINESS LOSS OF RS 3,99,13,429/- PERTAINING TO AY 2019. ON SCRUTINY OF THE ASSESSMENT ORDERS FOR THE AYS 2009- 10 TO 2012-13 IT WAS NOTED BY YOU THAT SUCH BUSINESS LOSS WAS NOT AVAILABLE FOR SET OFF IN AY 2015-16 BECAUSE THE LOS S WAS ITA NO. 304/KOL/2020 ASS ESSMENT YEAR: 2015-2016 INFINITY INFOTECH PARKS LIMITED 3 ENTIRELY SET OFF IN THE EARLIER YEARS I.E. IN AYS 2 011-12 AND 2012-13. IN THIS REGARD WE PLACE ON YOUR RECORD OUR FOLLOWING OBJECTIONS. BEFORE DEALING WITH THE SPECIFIC ISSUE, IT IS RELEV ANT TO PLACE ON RECORD THE FOLLOWING FACTS FOR CORRECT APPRECIAT ION OF THE ISSUE AT HAND. FOR AY 2009-10, RETURN U/S 139(1) WA S FILED DECLARING LOSS OF RS.19, 10,76,892/ -. SUCH NEGATIV E INCOME COMPRISED OF UNABSORBED DEPRECIATION OF RS.15,11,63 ,463/- AND BUSINESS LOSS OF RS.3,99,13,429/-. IN THE ORDER U/S 143(3) TOTAL INCOME WAS ASSESSED AS (-) RS.16,26,22, 649/ -. ON APPEAL THE CIT(A) DELETED THE ADJUSTMENTS MADE IN O RDER U/S 143(3) AND THEREFORE IN THE ORDER U/ S 251 TOTAL IN COME ASSESSED WAS (-)RS.19,10,76,892/ - I.E. THE LOSS AS WAS RETURNED. ON FURTHER APPEAL BY THE REVENUE, THE ITA T KOLKATA UPHELD THE ORDER OF THE CIT(A). SUBSEQUENT TO ITAT'S ORDER, AN ORDER OF REASSESSMEN T U/S 147 DATED 19.03.2016 WAS PASSED BY THE AO IN WHICH HE D ISALLOWED RS.8,43,55,803/- OUT OF THE CLAIM FOR DEPRECIATION AND THEREBY TOTAL INCOME WAS ASSESSED AT (-) RS.10,67,21,089/-. AS RESULT OF THE ORDER U/S 147 DATED 19.03.2016 NO LOSS IS FO UND, AVAILABLE FOR SET OFF FOR THE AY 2015-15. IT IS ON THIS PREMISE YOU HAVE INITIATED THE IMPUGNED REVISION PROCEEDING S U/S 263. IT IS HOWEVER SUBMITTED THAT THE PREMISE ON WHICH Y OU HAVE CONSIDERED THE AO'S ORDER TO BE ERRONEOUS IS FACTUA LLY WRONG AS A RESULT OF EVENTS WHICH HAPPENED SUBSEQUENT TO PASSING OF THE ORDER U/ S 147 DATED 19.03.2016. AGAINST THE OR DER U/S 147/143(3) DATED 19.03.2016 THE COMPANY HAD FILED A N APPEAL BEFORE CIT(A). THE CIT(A)-10, KOL IN HIS ORDER DATE D 30.10.2019 IN APPEAL NO. 10164/CIT(A)- 10/CIR-2(1)/ 2009- 10/2018-19/KOL ALLOWED FULL RELIEF TO THE COMPANY A ND DEPRECIATION DISALLOWANCE OF RS.8, 43, 55, 803/ - W AS FULLY DELETED BY HIM. CONSEQUENT TO GIVING EFFECT TO THE CIT(A)'S ORDER DATED 30.10.2019 THE REVISED ASSESSED INCOME IS (-) RS.19,10,76,892/- WHICH INTER-ALIA INCLUDES BUSINES S LOSS OF RS.3,99,13,429 AND FOR WHICH NO SETOFF HAS BEEN ALL OWED TILL AY 2014-15. AS SUCH THE BUSINESS LOSS ASSESSED IN A Y 2019-20 WAS RIGHTLY ALLOWED TO BE SET OFF BY THE AO IN AY 2 015-16 WHILE PASSING THE ASSESSMENT ORDER U/ S 143(3). IT IS THEREFORE SUBMITTED THAT THE ASSESSMENT ORDER FOR AY 2015-16 IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE FOR THE REASONS SET OUT IN YOUR SCN. 3. THE LD. PRINCIPAL CIT DID NOT FIND MERIT IN THE SUBMISSION MADE ON BEHALF OF THE ASSESSEE FOR THE FOLLOWING REASONS GI VEN IN PARAGRAPH NO. 5 OF HIS IMPUGNED ORDER:- ITA NO. 304/KOL/2020 ASS ESSMENT YEAR: 2015-2016 INFINITY INFOTECH PARKS LIMITED 4 5. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND GONE THROUGH SUBMISSION OF THE ASSESSEE AND DETAILS AVAILABLE ON RECORD. ON PERUSAL OF ASSESSMENT RECORDS AND ASS ESSMENT ORDER, IT IS OBSERVED THAT THE A.O DETERMINED TOTAL INCOME OF RS.10,72,51,271/- AND THEREAFTER ALLOWED SET OFF UN ABSORBED DEPRECIATION AND BUSINESS LOSSES PERTAINING TO A.Y 2009-10, 2010-11, 2013-14 AND 2014-15. AFTER SETTING OFF UNA BSORBED DEPRECIATION AND BUSINESS LOSSES PERTAINING TO EARL IER A.YS, ASSESSED INCOME WAS WORKED OUT AT NIL. IT IS FURTHE R FOUND FROM THE ASSESSMENT RECORDS FOR A.Y 2011-12 AND 201 2-13, THE BROUGHT FORWARD LOSS OF RS.8,57,42,940/- WERE SET O FF IN A.Y 2011-12 AND 2012-13. THE BROUGHT FORWARD LOSS WAS PERTAINING TO A.Y 2009-10. THE AVAILABLE BROUGHT FO RWARD LOSS WAS RS.19,10,76,892/- RELATED TO A.Y 2009-10. THE A SSESSMENT WAS MADE U/S 147/143(3) WITH A INCOME OF RS.10,67,2 1,089/- FOR A.Y 2009-10. IT IS EVIDENT FROM THE RECORD THAT AFTER ADJUSTMENT OF BROUGHT FORWARD LOSSES OF RS.19,10,76 ,892/- AGAINST INCOME OF RS.10,67,21,089/-, THE AVAILABLE BROUGHT FORWARD LOSS WAS ARRIVED AT RS.8,43,55,803/- (RS.19 ,1076,892 - RS.10,67,21,089). FROM THE RECORDS IT IS FURTHER FO UND THAT THE ASSESSEE HAS GOT RELIEF OF RS.2,53,45,109/- VIDE IT AT ORDER NO. 1317/KO1/2012 DATED 14.05.2018 FOR A.Y 2009-10. THE A.O WRONGLY ALLOWED EXCESS SET OFF OF LOSS OF RS.5,90,1 0,694/-. 4. FOR THE REASONS GIVEN ABOVE AND BY RELYING ON CE RTAIN JUDICIAL PRONOUNCEMENTS REFERRED TO IN HIS IMPUGNED ORDER, T HE LD. PRINCIPAL CIT SET ASIDE THE ORDER DATED 18.12.2017 PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE ACT VIDE HIS ORDER DATE D 04.02.2020 PASSED UNDER SECTION 263 OF THE ACT WITH A DIRECTION TO TH E ASSESSING OFFICER TO PASS A FRESH ASSESSMENT ORDER AFTER TAKING INTO CON SIDERATION THE OBSERVATIONS MADE BY HIM. AGGRIEVED BY THE ORDER OF THE LD. PRINCIPAL CIT PASSED UNDER SECTION 263, THE ASSESSEE HAS PREFERRE D THIS APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUN SEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ORDER PASSED BY THE ASSESSING OF FICER UNDER SECTION 143(3)/147 OF THE ACT ON 19.03.2016 DISALLOWING THE ASSESSEES CLAIM FOR DEPRECIATION TO THE EXTENT OF RS.8.43.55.803/- FOR A.Y. 2009-10 WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFO RE THE LD. CIT(APPEALS) ITA NO. 304/KOL/2020 ASS ESSMENT YEAR: 2015-2016 INFINITY INFOTECH PARKS LIMITED 5 AND THE LD. CIT(APPEALS) VIDE HIS APPELLATE ORDER D ATED 30.10.2019 DELETED THE ENTIRE DISALLOWANCE OF RS.8,43,55,803/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DEPRECIATION. HE HA S SUBMITTED THAT THE ASSESSING OFFICER WHILE GIVING EFFECT TO THE SAID O RDER OF THE LD. CIT(APPEALS) DATED 30.10.2019 HAS RECOMPUTED THE LO SS OF THE ASSESSEE- COMPANY FOR A.Y. 2009-10 AT RS.19,10,76,892/-, WHIC H, INTER ALIA, INCLUDES BUSINESS LOSS OF RS.3,99,13,429/-, WHICH WAS AVAILA BLE FOR SET OFF AGAINST THE INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSI DERATION, I.E. A.Y. 2015-16. HE HAS CONTENDED THAT THERE WAS THUS NO MI STAKE IN THE ORDER OF THE ASSESSING OFFICER DATED 18.12.2017 PASSED UNDER SECTION 143(3) ALLOWING THE SET OFF OF BROUGHT FORWARD LOSS AMOUNT ING TO RS.3,99,13,429/- PERTAINING TO A.Y. 2009-10 AND THE LD. PRINCIPAL CIT IS NOT JUSTIFIED IN REVISING THE SAID ORDER BY HIS IMP UGNED ORDER PASSED UNDER SECTION 263. WE ARE UNABLE TO ACCEPT THIS CON TENTION OF THE LD. COUNSEL FOR THE ASSESSEE. IT IS OBSERVED THAT THE A SSESSMENT FOR A.Y. 2015- 16 WAS COMPLETED BY THE ASSESSING OFFICER VIDE AN O RDER PASSED ON 18.12.2017 AND EVEN THOUGH THE SET OFF OF BUSINESS LOSS PERTAINING TO A.Y. 2009-10 WAS CLAIMED BY THE ASSESSEE TO THE TUNE OF RS.3,99,13,429/- AGAINST THE INCOME FOR A.Y. 2015-16, IT WAS INCUMBE NT UPON THE ASSESSING OFFICER TO ALLOW SUCH SET OFF ONLY TO THE EXTENT OF LOSS AS DETERMINED IN THE ASSESSMENT. THE UNDISPUTED FACT IN THIS REGARD IS T HAT THE TOTAL LOSS OF THE ASSESSEE FOR A.Y. 2009-10 WAS DETERMINED IN THE ASS ESSMENT COMPLETED UNDER SECTION 143(3)/147 VIDE AN ORDER DATED 19.03. 2016 AT RS.10,67,21,089/- AS AGAINST THE LOSS OF RS.19,10,7 6,892/- DECLARED BY THE ASSESSEE AND SINCE THE ENTIRE LOSS SO DETERMINED WA S ALREADY SET OFF AGAINST THE INCOME OF THE ASSESSEE FOR A.Y. 2011-12 AND 2012-13, NO LOSS AS DETERMINED IN THE ASSESSMENT FOR A.Y. 2009-10 WA S AVAILABLE FOR SET OFF AGAINST THE INCOME OF THE ASSESSEE FOR A.Y. 2015-16 WHEN THE ASSESSMENT ORDER UNDER SECTION 143(3) FOR A.Y. 2015-16 CAME TO BE PASSED BY THE ASSESSING OFFICER ON 18.12.2017. IN OUR OPINION, TH ERE WAS THUS AN ERROR IN THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3) IN ALLOWING THE SET OFF OF LOSS OF RS.3,99,13,429/- PE RTAINING TO A.Y. 2009-10 ITA NO. 304/KOL/2020 ASS ESSMENT YEAR: 2015-2016 INFINITY INFOTECH PARKS LIMITED 6 AND THE SAME BEING PREJUDICIAL TO THE INTEREST OF T HE REVENUE, THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3 ) DATED 18.12.2017 WAS LIABLE TO THE REVISED AS RIGHTLY HELD BY THE LD . PRINCIPAL CIT IN HIS IMPUGNED ORDER PASSED UNDER SECTION 263. WE, HOWEVE R, FIND THAT THE WORKING MADE BY THE LD. PRINCIPAL CIT REGARDING THE EXCESS SET OFF OF LOSS PERTAINING TO A.Y. 2009-10 ALLEGED TO BE WRONGLY AL LOWED BY THE ASSESSING OFFICER IS NOT CORRECT AND THIS MATTER SHOULD HAVE BEEN LEFT OPEN BY HIM TO THE ASSESSING OFFICER FOR MAKING THE WORKING ON THE BASIS OF ACTUAL LOSS PERTAINING TO A.Y. 2009-10 AS DETERMINED IN THE REL EVANT ASSESSMENT. WE ACCORDINGLY MODIFY THE IMPUGNED ORDER OF THE LD. PR INCIPAL CIT PASSED UNDER SECTION 263 TO THIS EXTENT. AS REGARDS THE AP PELLATE ORDER DATED 30.10.2019 PASSED BY THE LD. CIT(APPEALS) FOR A.Y. 2009-10 ALLOWING THE ENTIRE CLAIM OF THE ASSESSEE FOR DEPRECIATION AND T HE EFFECT GIVEN BY THE ASSESSING OFFICER TO THE SAID ORDER FINALLY DETERMI NING THE LOSS OF THE ASSESSEE-COMPANY FOR A.Y. 2009-10 AT RS.19,10,76,89 2/- ON WHICH A STRONG RELIANCE WAS PLACED BY THE LD. COUNSEL FOR T HE ASSESSEE AT THE TIME OF HEARING BEFORE US, WE MAY CLARIFY THAT THE ASSES SING OFFICER AFTER HAVING GIVEN THE EFFECT TO THE ORDER OF THE LD. PRI NCIPAL CIT AND DETERMINED THE LOSS OF THE ASSESSEE FOR A.Y. 2009-1 0 AT RS.19,10,76,892/-, WHICH, INTER ALIA, INCLUDED BUSINESS LOSS OF RS.3,9 9,13,429/-, WHICH WAS AVAILABLE FOR SET OFF AGAINST THE INCOME OF THE ASS ESSEE FOR A.Y. 2015-16 AS CLAIMED BY THE ASSESSEE, IS DUTY BOUND TO ALLOW SUC H SET OFF BY PASSING A CONSEQUENTIAL ORDER. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 18 TH , 2020. SD/- SD/- (A.T. VARKEY) (P.M. JAGTAP) JUDICIAL MEMBER VICE-PRESIDENT) KOLKATA, THE 18 TH DAY OF DECEMBER, 2020 ITA NO. 304/KOL/2020 ASS ESSMENT YEAR: 2015-2016 INFINITY INFOTECH PARKS LIMITED 7 COPIES TO : (1) INFINITY INFOTECH PARKS LIMITED, PLOT A3, BLOCK-GP, SECTOR-V, SALT LAKE, KOLKATA-700 091 (2) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069 (3) PRINCIPAL COMMISSIONER OF INCOME TAX-1, KO LKATA; (4) THE DEPARTMENTAL REPRESENTATIVE (5) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.
