M/s Kerala State Construction Corporation Ltd, Cochin V. ACIT, Trivandrum

ITA 518/COCH/2009

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7463 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 03-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAYAPRABHA
• Assessee Lawyers: PANKAJAKSHAN C GOVIND
• Keywords: Depreciation; Revised return

Judgement Text

1 ITA 518/COCH/2009 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) & SHRI SANJAY ARORA (AM) ITA NO.518/COCH/2009 (ASSESSMENT YEAR 2006-07) KERALA STATE CONSTRUCTION CORPN LTD VS ASSIST.CO MMISSIONER OF INCOME-M/S VARMA & VARMA, CAS CIR.1(1), THIRUVANANTHAPURAM A-12, KOWDIAR GARDENS GOLF LINKS ROAD, KOWDIAR THIRUVANANTHAPURAM-695 003 PAN : AABCK1314K (APPLICANT) (RESPONDENT) ASSESSEE BY : SHRI PANKAJAKSHAN C GOVIND RESPONDENT BY: MS. VIJAYAPRABHA DATE OF HEARING : 20-12-2011 DATE OF PRONOUNCEMENT : 25-01-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME-TAX(A)-I, TRIVANDRUM DATED 10-07-2009 AND PE RTAINS TO ASSESSMENT YEAR 2006- 07. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS REJEC TION OF THE CLAIM OF THE ASSESSEE FOR CARRY FORWARD OF LOSS AND DEPRECIATION. THE AS SESSING OFFICER FOUND THAT THE ORIGINAL RETURN WAS FILED DISCLOSING POSITIVE INCOME PROVISI ONALLY AND, THEREFORE, THE REVISED COMPUTATION OF INCOME FILED SUBSEQUENTLY DISCLOSING LOSS WAS NOT ACCEPTED. ACCORDING TO THE LD.REPRESENTATIVE, THE RETURN OF INCOME FILE D U/S 139(1) SHOWING THE POSITIVE INCOME CANNOT BE TREATED AS A RETURN OF INCOME IN V IEW OF RETURN FILED U/S 139(3) DECLARING LOSS. REFERRING TO THE COMPUTATION MADE BY THE ASSESSING OFFICER FOR THE 2 ITA 518/COCH/2009 ASSESSMENT YEAR 2002-03 THE LD.REPRESENTATIVE FOR T HE ASSESSEE SUBMITTED THAT THE NET LOSS RETURNED BY THE ASSESSEE WAS RS.1,53,81,497 A ND AFTER ALLOWING THE CARRY FORWARD LOSSES FOR THE ASSESSMENT YEAR 2001-02 TO THE EXTEN T OF RS.17,76,003 THE TOTAL LOSS COMPUTED BY THE ASSESSING OFFICER WAS RS.1,71,57,50 0. THERE IS NO INDICATION IN THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2002-03 TH AT THE TOTAL LOSS COMPUTED AT RS.1,71,57,500 WOULD NOT BE CARRIED FORWARD. THE V ERY FACT THAT THE ASSESSING OFFICER HAS NOT MENTIONED ANYTHING ABOUT CARRY FORWARD IN T HE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2002-03 SHOWS THAT THE ASSESSEE IS ENTITLED FOR CARRY FORWARD OF LOSS OF ASSESSMENT YEAR 2002-03 TO THE SUBSEQUENT ASSESSMEN T YEARS. THEREFORE, ACCORDING TO THE LD.REPRESENTATIVE, ONCE THE LOSS WAS QUANTIFIED AND THERE WAS NO REFERENCE ABOUT THE NON ELIGIBILITY OF THE ASSESSEE TO CARRY FORWAR D THE LOSSES, THE NATURAL PRESUMPTION IS THAT THE ASSESSEE IS ELIGIBLE FOR CARRY FORWARD OF LOSSES. 3. ON THE CONTRARY, THE LD.DR SUBMITTED THAT FOR TH E ASSESSMENT YEAR 2002-03 THE ASSESSEE HAS FILED THE RETURN OF INCOME SHOWING A P OSITIVE INCOME IN THE REGULAR COURSE. SUBSEQUENTLY A REVISED RETURN WAS FILED DECLARING L OSS. THE REVISED RETURN WAS SCRUTINISED U/S 143(3). THEREFORE, THE ASSESSEE WA S NOT ELIGIBLE FOR CARRY FORWARD OF LOSSES ASSESSED ON THE BASIS OF THE REVISED RETURN FILED U/S 139(3) FOR THE ASSESSMENT YEAR 2002-03. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE QUESTION ARISES FOR CONSIDERATION IS WHETHER THE ASSESSEE IS ENTITLED TO CARRY FORWARD THE LOSSES FO R THE ASSESSMENT YEAR 2002-03. FOR THE ASSESSMENT YEARS 2001-02, 2003-04, 2004-05 AND 2005 -06 THE COMMISSIONER OF INCOME- TAX(A) HAS DIRECTED THE ASSESSING OFFICER TO ALLOW THE LOSSES TO BE CARRIED FORWARD. THE REVENUE ACCEPTED THE DECISION OF THE COMMISSIONER O F INCOME-TAX(A). FOR THE ASSESSMENT YEAR 2002-03 THE ONLY CONTENTION OF THE ASSESSEE IS THAT IN THE ORIGINAL RETURN THE ASSESSEE HAS SHOWN POSITIVE INCOME ON TH E BASIS OF THE PROVISIONAL FIGURES WHICH WAS NOT AUDITED BY THE STATUTORY AUDITORS. H OWEVER, THE ASSESSEE HAS FILED LOSS 3 ITA 518/COCH/2009 RETURN U/S 139(3) OF THE ACT. THE LOSS RETURN WAS ADMITTEDLY TAKEN UP FOR SCRUTINY U/S 143(3). IN THE SCRUTINY ASSESSMENT, AFTER ISSUING NOTICE U/S 143(2), THE ASSESSING OFFICER ACCEPTED THE LOSS RETURNED BY THE ASSESSEE IN THE R EVISED RETURN AND AFTER ALLOWING CARRY FORWARD OF LOSS FOR THE ASSESSMENT YEAR 2001-02 THE TOTAL LOSS WAS QUANTIFIED AT RS.1,71,57,500. THE QUESTION ARISES FOR CONSIDERAT ION IS THAT WHEN THE ASSESSING OFFICER QUANTIFIED THE LOSS FOR THE ASSESSMENT YEAR 2002-03 WHETHER THE ASSESSEE IS ELIGIBLE TO CARRY FORWARD THE SAME. BY TAKING ADVANTAGE OF THE FACT THAT THE ASSESSEE HAS FILED THE RETURN U/S 139(3) TO CLAIM LOSS THE REVENUE CONTEND S THAT THE ASSESSEE IS NOT ELIGIBLE FOR CARRY FORWARD OF THE LOSSES. BUT THE FACT REMAINS IS THAT THE REVISED RETURN FILED BY THE ASSESSEE U/S 139(3) WAS TAKEN UP FOR SCRUTINY U/S 1 43(3) AND THE ASSESSING OFFICER QUANTIFIED THE LOSSES FOR THE ASSESSMENT YEAR 2002- 03. THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2002-03 HAS NOT SAID THAT THE ASSES SEE WAS NOT ELIGIBLE FOR THE CARRY FORWARD OF LOSSES QUANTIFIED. WHEN THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2002- 03 IS SILENT ABOUT THE CARRY FORWARD OF LOSSES, THE PRESUMPTION IS THAT THE ASSESSEE IS ELIGIBLE FOR CARRY FORWARD OF LOSSES AS QUANTIFIED BY THE ASSESSING AUTHORITY. IT IS FOR THE ASSESSING AUTHORITY TO RECORD REASONS AS TO WHY THE ASSESSEE IS NOT ELIGIBLE FOR CARRY FORWARD OF LOSSES QUANTIFIED BY HIM. IN THE ABSENC E OF ANY SUCH MENTION IN THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2002-03 TH IS TRIBUNAL IS OF THE OPINION THAT THE ASSESSEE IS ELIGIBLE FOR CARRY FORWARD OF LOSSE S. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ASSESSING O FFICER IS DIRECTED TO CARRY FORWARD THE LOSSES QUANTIFIED IN THE ASSESSMENT ORDER FOR THE A SSESSMENT YEAR 2002-03 IN ACCORDANCE WITH LAW. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF JANUARY, 2012. SD/- SD/- (SANJAY ARORA) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 25 TH JANUARY, 2012 PK/- 4 ITA 518/COCH/2009 COPY TO: 1. KERALA STATE CONSTRUCTION CORPORATION LTD, M/S VARM A & VARMA, CAS A-12, KOWDIAR GARDENS, GOLF LINKS ROAD, KOWDIAR, TH IRUVANANTHAPURAM 2. ASSIST.COMMISSIONER OF INCOME-TAX, CIR.1(1), TRIV ANDRUM 3. COMMISSIONER OF INCOME-TAX(A)-I, TRIVANDRUM 4. THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, C OCHIN BENCH