The ITO, Ward-1(2), RAJKOT-GUJARAT V. Shri Pravinchandra C. Parekh (HUF), GONDAL

ITA 420/RJT/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94049 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-05-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 08-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI N. S. SAINI , ACCOUNTANT MEMBER . ITA. NO. 420 / RJT / 2013 (ASSESSMENT YEAR: 200 3 - 0 4 ) ITO, WARD - 1(2), RAJKOT APPELLANT VS. SHRI PRAVINCHANDRA C. PAREKH(HUF), M/S. PARDESH DEHYDRATION CO., N.H. 8B, GUNDALA CROSSING, GONDAL, DIST. RAJKOT (GUJARAT RESPONDENT & ITA. NO. 505 / RJT / 2012 (ASSESSMENT YEAR: 2003 - 04 ) ITO, WARD - 1(2), RAJKOT APPELLANT VS. SHRI PRAVINCHANDRA C. PAREKH(HUF), M/S. PARDESH DEHYDRATION CO., N.H. 8B, GUNDALA CROSSING, GONDAL, DIST. RAJKOT (GUJARAT RESPONDENT ITA NO S . 420 - 422, 238 & 239 /RJT/13 & 505/RJT/12 FOR A.YS. 03 - 04 TO 05 - 06 [ ITO VS. SHRI PRAVINCHANDRA C. PAREKH) PAGE 2 & ITA. NO. 421 / RJT / 2013 (ASSESSMENT YEAR: 2004 - 05 ) ITO, WARD - 1(2), RAJKOT APPELLANT VS. SHRI PRAVINCHANDRA C. PAREKH(HUF), M/S. PARDESH DEHYDRATION CO., N.H. 8B, GUNDALA CROSSING, GONDAL, DIST. RAJKOT (GUJARAT RESPONDENT & ITA. NO. 238 / RJT / 2013 (ASSESSMENT YEAR: 2004 - 05 ) ITO, WARD - 1(2), RAJKOT APPELLANT VS. SHRI PRAVINCHANDRA C. PAREKH(HUF), M/S. PARDESH DEHYDRATION CO., N.H. 8B, GUNDALA CROSSING, GONDAL, DIST. RAJKOT (GUJARAT RESPONDENT & ITA NO S . 420 - 422, 238 & 239 /RJT/13 & 505/RJT/12 FOR A.YS. 03 - 04 TO 05 - 06 [ ITO VS. SHRI PRAVINCHANDRA C. PAREKH) PAGE 3 ITA. NO. 422 / RJT / 2013 (ASSESSMENT YEAR: 2005 - 06 ) ITO, WARD - 1(2), RAJKOT APPELLANT VS. SHRI PRAVINCHANDRA C. PAREKH(HUF), M/S. PARDESH DEHYDRATION CO., N.H. 8B, GUNDALA CROSSING, GONDAL, DIST. RAJKOT (GUJARAT RESPONDENT & ITA. NO. 239 / RJT / 2013 (ASSESSMENT YEAR: 2005 - 06 ) ITO, WARD - 1(2), RAJKOT APPELLANT VS. SHRI PRAVINCHANDRA C. PAREKH(HUF), M/S. PARDESH DEHYDRATION CO., N.H. 8B, GUNDALA CROSSING, GONDAL, DIST. RAJKOT (GUJARAT RESPONDENT PAN: AAIHP4156Q ITA NO S . 420 - 422, 238 & 239 /RJT/13 & 505/RJT/12 FOR A.YS. 03 - 04 TO 05 - 06 [ ITO VS. SHRI PRAVINCHANDRA C. PAREKH) PAGE 4 / BY ASSESSEE : SHRI AVINASH KUMAR, D.R. / BY REVENUE : SHRI P. C. PAREKH (ASSESSEE HIMSELF) / DATE OF HEARING : 1 9 .0 5 .2015 / DATE OF PRONOUNCEMENT : 22 .0 5 .2015 ORDER PER SHAILENDRA KUMAR YADAV, J.M: ALL T HESE APPEALS PERTAIN TO SAME ASSESSEE FILED BY REVENUE ON QUANTUM AS WELL AS PENALTY FOR THREE YEAR. SO, THEY ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ITA NO. 420 / RJT /20 1 3 FOR A.Y. 2003 - 0 4 , ON QUANTUM REVENUE HAS FILED THE APPEAL ON THE FOLLOWING GROUND S : ( 1 ) WHETHER THE LD. CIT(A) WAS CORRECT WHILE RULING THAT THE APPELLANT WAS ENTITLED FOR SET - OFF OF LOSS WHEN THE APP ELLANT HAD ACTUALLY FILED CONSOLIDATED RETURN FOR A.Y. 2003 - 04 (I.E. ONLY FOR BENEFIT OF SET - OFF OF EARLIER LOSSES) AND NOT FOR A.Y. S 1999 - 2000, 2000 - 01 AND 2001 - 02 (I.E. ACTUALLY WHEN THE LOSSES WERE INCURRED). THE NON - FILING OF CONSOLIDATED RETURNS FOR A.Y. S 1999 - 2000, 2000 - 01 AND 2001 - 02 SHOULD NOT ENTILE THE ASSESSEE TO CLAIM SET - OFF OF SUCH LOSS AGAINST INCOME OF A.Y. 2003 - 04 . (2) WHETHER THE LD. CIT(A) WAS CORRECT IN APPLYING THE RATIO OF THE JUDGMENT OF SPECIAL BENCH IN THE CASE OF NICHOLAS AEAS FUND LTD. VS. ADIT (2009) 304 ITR (AT) 325 (MUMBAI) AS THE DISTINGUISHABLE FACT IS THAT ITA NO S . 420 - 422, 238 & 239 /RJT/13 & 505/RJT/12 FOR A.YS. 03 - 04 TO 05 - 06 [ ITO VS. SHRI PRAVINCHANDRA C. PAREKH) PAGE 5 NICHOLAS AEAS FUND LTD. HAD FILED CONSOL IDATED RETURNS IN THE A.Y. WHEN THE LOSS WAS ACTUALLY INCURRED WHEREAS THE ASSESSEE IN QUESTION DID NOT SUBMIT ANY PROOF OF FILING CONSOLIDATED RETURNS IN THE YEARS IN WHICH LOSSES WERE INCURRED. SIMILAR GROUNDS HAVE BEEN RAISED IN A.Y. 2004 - 05 & 2005 - 06 . 3 . I N ORIGINAL ASSESSMENT ORDER, ASSESSING OFFICER DID NOT ALLOW SET OFF OF CARRIED FORWARD LOSSES OF ONE PROPRIETARY CONCERN AGAINST ANOTHER PROPRIETARY CONCERN ON THE GROUND THAT THEY WERE HAVING DIFFERENT PANS AND WERE FILING SEPARATE RETURNS OF INCO ME AND ASSESSEE DID NOT FILE A CONSOLIDATED RETURN. CIT(A) CONFIRMED THE ACTION OF ASSESSING OFFICER AND ITAT, RAJKOT BENCH VIDE ITS ORDER IN ITA NO. 538,539 & 540/RJT/2008, DATED 24.04.2009 SET ASIDE THE MATTER TO ASSESSING OFFICER WITH A DIRECTION TO VE RIFY WHETHER ASSESSEE HAS FILED CONSOLIDATED RETURNS OR NOT . BUT ASSESSING OFFICER PASSED ORDER AGAIN DISALLOWING THE SET OFF OF LOSSES ON THE GROUND THAT ASSESSEE HAD NOT FILED A CONSOLIDATED RETURN. HOWEVER, CIT(A) VIDE HIS ORDER DATED 13.07.2011 ALLOW ED ASSESSEE S APPEAL ON THE GROUND THAT ASSESSEE HAD PRODUCED THE PROOF OF FILING A CONSOLIDATED RETURN BEFORE ASSESSING OFFICER. HOWEVER, THE DEPARTMENT PREFERRED APPEAL BEFORE ITAT, RAJKOT AGAINST THE ORDER OF CIT(A) DATED 13.07.2011 ON THE GROUND THAT CIT(A) HAD PASSED THIS ORDER WITHOUT CALLING FOR REMAND REPORT OR WITHOUT GIVING OPPORTUNITY TO ASSESSING OFFICER. ITAT, RAJKOT BENCH VIDE ITS ORDER DATED 04.05.2012 SET ASIDE THE ORDER OF CIT(A) DIRECTING HIM TO FORWARD THE PAPER ITA NO S . 420 - 422, 238 & 239 /RJT/13 & 505/RJT/12 FOR A.YS. 03 - 04 TO 05 - 06 [ ITO VS. SHRI PRAVINCHANDRA C. PAREKH) PAGE 6 BOOK SUBMITTED BY ASSESS EE TO CONCERNED ASSESSING OFFICER FOR HIS COMMENTS/REMAND REPORT AND TO PASS AN ORDER AFTER RECEIVING REMAND REPORT IN QUESTION. 3.1 AS DIRECTED BY ITAT, COPY OF PAPER BOOK WAS FORWARDED TO ASSESSING OFFICER FOR HIS COMMENTS VIDE THIS OFFICE LETTER DATED 31.08.2012. ASSESSING OFFICER VIDE HIS LETTER DATED 03.10.2012 HAD SUBMITTED HIS REMAND REPORT AND ADMITTED IN PARA 3 ON PAGE 2 THAT ASSESSEE DID FILE CONSOLIDATED RETURNS FOR 2003 - 04, 2004 - 05 & 2005 - 06 WITH CONCERN ITO, RAJKOT AND ALSO SEPARATE RETURNS W ITH ASSESSING OFFICER HAVING TERRITORIAL JURISDICTION IN RESPECT OF ALL OF ITS FOUR UNITS. HOWEVER HE TRAVELLED BEYOND THE DIRECTIONS OF ITAT AND SUBMITTED THAT QUESTION ARISES WHETHER THE RETURNS FILED WITH DIFFERENT PANS CAN CLAIM SET OFF OF LOSS OF ON E UNIT AGAINST THE INCOME OF ANOTHER UNIT HAVING DIFFERENT PAN. CIT(A) HAVING GONE THROUGH THE ORDER OF ITAT AND REMAND REPORT FOUND THAT ITAT HAD ALREADY CONCLUDED IN PARA 5 OF ITS FIRST ORDER DATED 24.04.2009 THAT IF ASSESSEE FILES CONSOLIDATED RETURNS , LOSS HAS TO BE ALLOWED AS PER DECISION OF A SPECIAL BENCH AND IN THE SECOND ORDER DATED 04.05.2012, ITAT HAS DIRECTED CIT(A) TO SEND THE PAPER BOOK TO ASSESSING OFFICER SIMPLY FOR VERIFICATION OF FACT WHETHER ASSESSEE HAS FILED CONSOLIDATED RETURN OR NOT. THERE IS NOTHING ON RECORD TO SUGGEST THAT REVENUE HAS GONE AGAINST ORDER OF ITAT BEFORE JURISDICTIONAL HIGH COURT. FROM THIS, THE PICTURE EMERGES THAT ASSESSEE HAD FILED CONSOLIDATED RETURN AS REPORTED BY ASSESSING OFFICER IN HIS REMAND REPORT, ASSESSE E ITA NO S . 420 - 422, 238 & 239 /RJT/13 & 505/RJT/12 FOR A.YS. 03 - 04 TO 05 - 06 [ ITO VS. SHRI PRAVINCHANDRA C. PAREKH) PAGE 7 WAS ENTITLED FOR SET OFF OF LOSS . A CCORDINGLY ASSESSING OFFICER WAS RIGHTLY DIRECTED BY CIT(A) TO GIVE THE BENEFIT OF SET OFF OF CARRIED FORWARD LOSS OF ONE UNIT AGAINST PROFIT OF ANOTHER UNIT AFTER VERIFICATION FROM RECORD S AND FURTHER SAFEGUARD ASSESS ING OFFICER WAS ALSO RIGHTLY DIRECTED NOT TO TRAVEL BEYOND DIRECTIONS OF HIGHER APPELLATE AUTHORITIES AND NOT TO RAISE ANY NEW ISSUE AT THIS STAGE OTHER THAN THE ISSUE WHICH HE HAS BEEN DIRECTED TO EXAMINE. THIS REASONED FINDING OF CIT(A) NEEDS NO INTERFE RENCE FROM OUR SIDE. WE UPHOLD THE SAME. AS A RESULT, REVENUE S APPEAL IS DISMISSED. 3.2 SIMILAR ISSUE AROSE IN ITA NOS. 421 & 422/RJT/13 FOR A.Y. 2004 - 05 & 2005 - 06. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, WE ARE NOT INCLINED TO INTERFERE IN THE FINDING OF CIT(A) FOR BOTH YEARS WHEREBY FOLLOWING A.Y. 2003 - 04, HE HAS GRANTED RELIEF TO ASSESSEE BY OBSERVING THAT ASSESSEE IS ENTITLED FOR SET OFF OF LOSS AND ACCORDINGLY ASSESSING OFFICER WAS RIGHTLY DIRECTED BY CIT(A) TO GIVE THE BENEFIT OF SET OF F OF CARRIED FORWARD LOSS OF ONE UNIT AGAINST PROFIT OF ANOTHER UNIT AFTER VERIFICATION FROM RECORDS. SAME IS UPHELD. AS A RESULT, REVENUE S APPEALS FOR BOTH YEARS ARE DISMISSED. 4 . IN ITA NO. 505 / RJT /20 12 FOR A.Y. 2003 - 04, ON PENALTY REVENUE HAS FILED THE APPEAL ON THE FOLLOWING GROUND: 1) THE LEARNED CIT(A) - I, RAJKOT HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY U/S.271(1)(C) OF RS.11,24,770/ - . ITA NO S . 420 - 422, 238 & 239 /RJT/13 & 505/RJT/12 FOR A.YS. 03 - 04 TO 05 - 06 [ ITO VS. SHRI PRAVINCHANDRA C. PAREKH) PAGE 8 SIMILAR GROUND HA S BEEN RAISED IN A.Y. 2004 - 05 & 2005 - 06. 4.1 IN QUANTUM, WE HAVE CONFIRMED THE O RDER OF CIT(A), WHEREBY HE HAS GRANTED RELIEF TO ASSESSEE AS DISCUSSED ABOVE. SO, CONSEQUENTIAL PENALTY IN THIS CASE , WHICH HAS BEEN RIGHTLY DELETED BY CIT(A) , NEEDS NO INTERFERENCE FROM OUR SIDE. AS A RESULT, REVENUE S APPEAL IS DISMISSED. 4.2 SIMILAR ISSUE AROSE IN ITA NOS. 238 & 239/RJT/13 FOR A.Y. 2004 - 05 & 2005 - 06. CIT(A) DELETED PENALTY FOR BOTH YEARS. WE UPHOLD THE SAME. AS A RESULT, REVENUE S APPEALS FOR BOTH YEARS ARE DISMISSED. 5 . IN THE RESULT, REVENUES SIX APPEALS, THREE ON QUANTUM AND T HREE ON PENALTY ARE DISMISSED AS DISCUSSED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF MA Y , 201 5 . SD/ - SD/ - (N. S. SAINI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT : DATED 22 /0 5 /2015 S K SINHA COPY OF THE ORDER FORWARDED TO: - 1. THE ASSESSEE . 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, RAJKOT 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT