SALIENT TRADERS P.LTD, MUMBAI V. ITO WD 11(1)(3), MUMBAI

ITA 332/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2811 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 12-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATISH RAJORE
• Assessee Lawyers: FEROZE ANDHYARUJ INA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G , BENCH MUMBAI BEFORE SHRI PAWAN SINGH, JM & SHRI M.BALAGANESH, AM ITA NO. 332 / MUM/20 1 8 & 331/MUM/2018 ( ASSESSMENT YEAR : 2013 - 14 & 2014 - 15 ) M/S. SALIENT TRADERS PVT. LTD. C/O. P.M.CONSULTANCY SERVICES KUTI R VASANT PARK CO - OPERATIVE HOUSING SOCIETY LTD., JUHU CHURCH ROAD, OPP. ST. JOSEPH HIGH SCHOOL VILE PARLE WEST MUMBAI 400 049 VS. ITO 11(1)(3), MUMBAI PAN/GIR NO. AAICS2454B ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY SHRI FEROZE ANDHYARUJINA , ADV RE VENUE BY SHRI SATISH RAJORE , DR DATE OF HEARING 12/06 /201 9 DATE OF PRONOUNCEMENT 14/06 /201 9 / O R D E R PER M. BALAGANESH (A.M) : THESE APPEAL S IN ITA NO S . 332/MUM/2018 & 331/MUM/2018 FOR A.Y. 2013 - 14 & 2014 - 15 RESPECTIVELY AR ISE OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 18 IN APPEAL NO. CIT(A) - 18/IT - 261/ITO - 11(1)(3)/2016 - 17 DATED 28/09/2017 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS ACT) DATED 25/11/2016 BY THE LD. INCOME TAX OFFICER 11(1)(3), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). SINCE ITA N OS.332/MUM/2018 & 331/MUM/2018 M/S. SALIENT TRADERS PVT. LTD. 2 IDENTICAL ISSUES ARE INVOLVED IN THESE APPEALS, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATE ORDER, FOR THE SAKE OF CONVENIENCE. THE FACTS OF A.Y.2013 - 14 ARE TAKEN UP FOR ADJUDICATION AND THE DECISION RENDERED THEREON WOULD APPLY WITH EQUAL FORCE FOR A.Y.2014 - 15. 2. THE ASSESSEE HAD RAISED SEVERAL GROUNDS. THE SHORT ISSUE THAT ARISES FOR OUR CONSIDERAT ION IS AS TO WHETHER THE LD. CIT(A) WAS JUSTIFIED IN NOT ALLOWING THE CARRY FORWARD OF LOSSES OF EARLIER YEARS IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF REAL ES TATE DEVELOPMENT I.E. LAND DEVELOPMENT, BUILDING AND CONSTRUCTION AND RE - DEVELOPMENT OF PROPERTIES. THE ASSESSEE COMPANY FILED ITS RETURN FOR THE A.Y.2013 - 14 ON 05/10/2013 DECLARING TOTAL INCOME AT RS. NIL AFTER SET OFF OF BROUGHT FORWARD LOSSES AS UNDER: - SR. NO. ASSESSMENT YEARS SET OFF & CARRY FORWARD LOSS AMOUNT IN (RS.) B/F LOSS SET - OFF IN CY C/F LOSS 1 2011 - 12 2,38,599 2,38,599 0 2 2012 - 13 7,59,52,387 11,45,236 7,48,07,151 TOTAL 7,61,90,986 13,83,835 7,48,07,151 3.1. THE ASSESSEE COMPANY PAI D INCOME TAX U/S.115JB OF THE ACT OF BOOK PROFITS IN THE SUM OF RS.10,66,371/ - . THE LD. AO DID NOT ALLOW THE SET OFF OF BROUGHT FORWARD LOSSES OF A.Y.2012 - 13 WITH THE INCOME OF A.Y.2013 - 14 ON THE GROUND THAT IN ASSESSMENT FRAMED FOR A.Y.2012 - 13, THE BOOKS OF ACCOUNTS WERE REJECTED BY THE LD. AO U/S.145(3) AND THE INCOME OF THE ASSESSEE WAS ESTIMATED AT 8% OF TURNOVER . ACCO R DINGLY, THE ITA N OS.332/MUM/2018 & 331/MUM/2018 M/S. SALIENT TRADERS PVT. LTD. 3 TOTAL INCOME OF THE ASSESSEE FOR A.Y.2012 - 13 WAS DETERMINED AT RS. 3,60,34,820/ - . BASED ON THIS, THE LD. AO CONCLUDED THAT TH ERE WAS NO LOSS AVAILABLE WITH THE ASSESSEE FOR A.Y.2012 - 13 EITHER TO BE SET OFF WITH THE INCOME OF A.Y.2013 - 14 OR TO BE CARRIED FORWARD TO SUBSEQUENT YEARS. THE LD. AO ALSO DENIED CARRY FORWARD OF LOSSES ON THE GROUND THAT ASSESSEE HAS VIOLATED PROVISIONS OF SECTION 79 OF THE INCOME TAX ACT, IN VIEW OF THE CHANGE IN SHAREHOLDING. THIS ACTION OF LD. AO WAS UPHELD BY THE LD. CIT(A). 4. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD RIVAL SUBMISSIONS. THE LD. AR PLACED ON RECORD THE COPY O F THE ORDER OF THE LD. CIT(A) FOR A.Y.2012 - 13 IN APPEAL NO. CIT(A) - 18/IT - 183/ACIT - 1(1)(2)/15 - 16 DATED 30/01/2017 WHEREIN THE ACTION OF THE LD. AO IN REJECTING THE BOOKS OF ACCOUNTS U/S.145(3) WAS DISMISSED AND THE ADDITION MADE AT 8% OF TURNOVER IN THE SUM OF RS.3,60,34,816/ - WAS DIRECTED TO BE DELETED. IN OTHER WORDS, THE LD. CIT(A) DIRECTED THE LD. AO TO ACCEPT THE LOSS CLAIMED BY THE ASSESSEE IN THE RETURN FOR A.Y.2012 - 13. AGAINST THIS APPELLATE ORDER, THERE WAS NO APPEAL PREFERRED BY THE REVENUE TO THE TRIBUNAL FOR A.Y.2012 - 13. THE LD. AR ALSO PLACED ON RECORD, THE COPY OF THE ORDER DATED 28/09/2017 PASSED BY THE LD. AO GIVING EFFECT TO THE CIT(A)S ORDER WHEREIN HE HAD CATEGORICALLY STATED THAT A SUM OF RS.7,59,52,387/ - , BEING THE LOSS OF A.Y.2012 - 13 IS ALLOWED TO BE CARRIED FORWARD TO SUBSEQUENT YEARS. IN VIEW OF THE AFORESAID ORDERS OF THE LD. AO AND LD. CIT(A) SUPRA, WE HOLD THAT THE BASIC GROUND ON WHICH THE REVENUE HAD DENIED THE BENEFIT OF CARRY FORWARD LOSSES TO THE ASSESSEE STANDS DISMISSED AND A CCORDINGLY, WE DIRECT THE LD. AO TO ALLOW THE BENEFIT OF CARRY FORWARD LOSSES IN THE SUM OF RS. 7,59,52,387/ - FOR A.Y.2012 - 13 TO SUBSEQUENT YEARS. THERE IS NO QUESTION OF ESTIMATING ANY ADDITION TO NET PROFIT IN VIEW OF THE ABOVE FOR A.YRS.2013 - 14 AND 2014 - 15. ITA N OS.332/MUM/2018 & 331/MUM/2018 M/S. SALIENT TRADERS PVT. LTD. 4 5.1. THE DECISION RENDERED HEREINABOVE FOR A.Y.2013 - 14 WOULD APPLY WITH EQUAL FORCE FOR A.Y.2014 - 15 ALSO. IN VIEW OF THE AFORESAID OBSERVATIONS, THE OTHER ARGUMENTS ADVANCED BY THE LD. AR TOGETHER WITH CERTAIN DOCUMENTS TO DRIVE HOME THE POINT THAT ASSESSEE HAD INDEED COMPLIED WITH THE PROVISIONS OF SECTION 7 9 OF THE ACT NEED NOT BE LOOKED INTO AS IT BECOMES ACADEMIC IN NATURE AND THEY ARE LEFT OPEN . ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE IN BOTH THE YEARS ARE ALLOWED. 6. IN THE RESULT, BOT H THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 14 / 06 /201 9 SD/ - ( PAWAN SINGH ) SD/ - ( M.BALAGANESH ) JUDICIAL MEMBER ACCOUNTANT MEMB ER MUMBAI; DATED 14 / 06 /201 9 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//