M/s Taiko Chandernagr Chemicals Pvt. Ltd., Hyderabad V. ACIT, Hyderabad

ITA 695/HYD/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69801 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-07-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 06-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV BENJWAL
• Assessee Lawyers: C P RAMASWAMI
• Keywords: Depreciation; Opportunity of being heard; Revised return; Unabsorbed depreciation
• Section: 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.695/HYD/2010 ASSESSMENT YEAR 2005-2006 M/S. TAIKO CHANDERNAGAR CHEMICALS PVT. LTD. SECUNDERABAD 500 009. PAN AAACT3663R VS. ACIT, CIRCLE 2 (3) HYDERABAD APP EL LANT RESPONDENT APPELLANT BY : SHRI C.P. RAMASWAMI (AR) RESPONDENT BY : SHRI RAJEEV BENJWAL (DR) DATE OF HEARING : 11.09.2013 DATE OF PRONOUNCEMENT : 11.09.2013 ORDER PER SAKTIJIT DEY, J.M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-III, HYDERABAD DATED 15.03.2010 FOR THE A SSESSMENT YEAR 2005-2006. 2. THE SOLE GRIEVANCE OF THE ASSESSEE AS ARISES OUT OF THE GROUND RAISED IS WITH REGARD TO NON-CONSIDERATION O F THE REVISED RETURN FILED BY THE ASSESSEE CLAIMING CARRY FORWARD O F LOSS. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE A PRIVATE LIM ITED COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND PROCESSING OF ACTIVATED BLEACHING EARTH. FOR THE IM PUGNED ASSESSMENT YEAR THE ASSESSEE FILED ITS RETURN OF INC OME ON 1.11.2005 DECLARING NIL INCOME AFTER SET OFF OF B ROUGHT FORWARD LOSSES. DURING THE COURSE OF SCRUTINY ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER ON VERIFICATION OF THE AUDIT REPORT SUBMITTED WITH THE RETURN OF INCOME, NOTICED THAT IN ANNEXURE- 9 OF THE SAID 2 REPORT UNABSORBED DEPRECIATION AVAILABLE FOR SET OF F WAS SHOWN AT RS.5,39,327/-. IN THE COMPUTATION OF INCOME HOWEVER , THE ASSESSEE HAS CLAIMED SET OFF OF UNABSORBED LOSSES O F EARLIER YEARS AT RS.1,16,09,299/-. WHEN THE ASSESSING OFFICER SOU GHT EXPLANATION FROM THE ASSESSEE IN THIS REGARD, THE AS SESSEE FILED COPIES OF RETURNS OF INCOME FILED FOR THE ASSESSMEN T YEAR 2004- 05. FROM THE COPIES OF THE RETURNS SUBMITTED, THE A SSESSING OFFICER NOTICED THAT AS PER THE RETURN OF INCOME FI LED ON 30.10.2004 FOR ASSESSMENT YEAR 2004-05 THE ASSESSEE CLAIMED CARRY FORWARD OF LOSS AT RS.5,39,327/-. HOWEVER, IN THE REVISED RETURN FILED ON 31.10.2005 BEFORE THE SAME ASSESSIN G OFFICER AT DELHI THE ASSESSEE HAS ENCLOSED A COMPUTATION OF TO TAL INCOME WHEREIN, IT HAS CLAIMED TRADE ADVANCES WRITTEN-OFF OF RS.1,78,60,000/- AS ITEMS NOT INCLUDED IN THE PROF IT AND LOSS ACCOUNT. THE ASSESSING OFFICER FURTHER NOTED THAT A SSESSEE HAD ARRIVED AT THE NET PROFIT/LOSS FOR THE YEAR ENDING 3 1.3.2004 AT RS.9,43,960/-. HOWEVER, BELOW THE PROFIT FOR THE YEA R, THE ASSESSEE WAS SHOWN ITEMS LIKE INCOME TAX TRANSFER, D EFERRED TAXATION AND BALANCE WRITTEN OFF AMOUNTING TO RS.1,7 8,60,000/-, WHICH HAS BEEN CLAIMED AS DEDUCTION IN THE REVISED RETURN. 4. THE ASSESSING OFFICER OPINED THAT FROM THE STATE MENTS FILED BY THE ASSESSEE IT IS NOT KNOWN WHY THE SAID AMOUNT W AS DEBITED BELOW THE PROFIT LINE AND IT COULD NOT ALSO BE ASCE RTAINED WHETHER THE REVISED RETURN OF INCOME WAS ACCEPTED OR NOT AS IT WAS FILED AT DELHI. HE FURTHER OPINED THAT THE REVISED RETURN AL SO DOES NOT GIVE ANY REASONS FOR CLAIM OF BALANCE WRITTEN-OFF IN THE BOOKS OF ACCOUNTS WITHOUT CLAIMING IT IN THE ORIGINAL RETURN . THE ASSESSING OFFICER FINALLY CONCLUDED THAT THE SET OFF OF BROUGH T FORWARD LOSS AS PER THE AUDIT REPORT HAS TO BE RESTRICTED TO RS. 5,39,327/- ONLY AND ACCORDINGLY, PASSED THE ASSESSMENT ORDER. 5. THE ASSESSEE PREFERRED AN APPEAL AGAINST THE ASS ESSMENT ORDER PASSED BEFORE THE CIT(A). DURING THE HEARING OF APPEAL 3 BEFORE CIT(A), IT WAS SUBMITTED BY THE ASSESSEE THAT ORIGINAL RETURN FOR THE ASSESSMENT YEAR 2004-2005 WAS FILED A T DELHI WITHIN THE DUE DATE. SUBSEQUENTLY, NOTICING AN OMISS ION IN THE ORIGINAL RETURN A REVISED RETURN WAS FILED ON 31.10 .2005 ALSO AT DELHI CLAIMING CARRY FORWARD OF LOSS OF RS.1,83,81, 140/-. IT WAS SUBMITTED THAT AS THE REVISED RETURN WAS FILED WITH IN THE PRESCRIBED TIME, THE ASSESSEE IS ELIGIBLE FOR CARRY FORWARD OF LOSS CLAIMED IN THE SAID REVISED RETURN. IT WAS FURTHER SUBMITTED THAT ACKNOWLEDGMENT OF THE RETURN SHALL BE DEEMED TO BE THE INTIMATION UNDER SECTION 143(1) AND IS THE EVIDENCE FOR CLAIM OF BROUGHT FORWARD LOSSES. IT WAS SUBMITTED THAT CHANG E OF JURISDICTION WILL NOT AFFECT CLAIM OF BROUGHT FORWAR D LOSSES. IT WAS SUBMITTED THAT A REVISED RETURN FILED UNDER SECTION 139(5) WILL SUBSTITUTE THE ORIGINAL RETURN AND SHOULD BE TREATE D AS A RETURN FILED UNDER SECTION 139(3) READ WITH SECTION 139(1) . HENCE, LOSSES DISCLOSED IN A RETURN ORIGINALLY FILED UNDER SECTION 139(3) AND SUBSEQUENTLY REVISED U/S. 139(5) WOULD BE ELIGIBLE F OR CARRY FORWARD AND SET OFF. 6. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE WAS OF THE VIEW THAT AS PER THE PROVISIONS OF SEC. 80 OF THE ACT, THE BUSINESS LOSS WHICH HAS BEEN DETERMINE D / QUANTIFIED BY THE ASSESSING OFFICER IN AN ASSESSMENT IN CASE OF AN ASSESSEE, CAN ONLY BE CARRIED FORWARD FOR SET-OFF IN THE SUBSEQUENT ASSESSMENT YEARS. THE CIT(A) HELD THAT SI NCE IN THE CASE OF THE ASSESSEE, NO EVIDENCE HAS BEEN FURNISHE D TO SHOW THAT THE UNABSORBED BUSINESS LOSS CLAIMED IN THE RE VISED RETURN HAS BEEN DETERMINED BY THE ASSESSING OFFICER TO BE C ARRIED FORWARD, THE CLAIM OF THE ASSESSEE CANNOT BE ALLOWE D IN THE IMPUGNED ASSESSMENT YEAR. THE CIT(A) FURTHER OBSERVE D THAT THE ASSESSEE HAD FILED THE REVISED RETURN AT NEW DELHI AFTER COMPLETION OF THE AUDIT OF ITS BOOKS OF ACCOUNTS FO R THE ASSESSMENT YEAR 2005-2006 WITH A DISHONEST MOTIVE TO REDUCE 4 TAXABLE INCOME OF THE IMPUGNED ASSESSMENT YEAR. HE FU RTHER OBSERVED THAT FILING OF REVISED RETURN AT NEW DELHI ON 31.10.2005 IS QUESTIONABLE AS JURISDICTION OF THE ASSESSEE WAS LYING AT HYDERABAD AS ON 31.10.2005. HE NOTED THAT, AFTER SHI FTING OF ITS REGISTERED OFFICE FROM NEW DELHI TO HYDERABAD WITH E FFECT FROM 17.8.2005, THE ASSESSEE ITSELF HAD INTIMATED THE AD DL. CIT, NEW DELHI THAT THEY HAVE FILED THEIR RETURN OF INCOME FO R THE ASSESSMENT YEAR 2005-2006 AT HYDERABAD, THEREBY, ADMIT TING THAT THE ASSESSMENT JURISDICTION OVER THEIR CASE STO OD TRANSFERRED TO HYDERABAD BY THAT DATE I.E., 16.10.2005. THEREFORE , UNDER THE CIRCUMSTANCES THE REVISED RETURN FILED AT DELHI ON 31.10.2005 FOR THE ASSESSMENT YEAR 2004-2005 CANNOT BE TREATED AS A VALID RETURN. ON THE AFORESAID BASIS, THE CIT(A) FINALLY C ONCLUDED THAT ASSESSEES CLAIM OF CARRY FORWARD OF LOSS AS PER THE REVISED RETURN CANNOT BE ALLOWED. 7. WE HAVE HEARD SUBMISSIONS OF THE PARTIES AND PER USED THE MATERIALS ON RECORD AS WELL AS THE ORDERS PASSED BY THE REVENUE AUTHORITIES. UNDISPUTED FACTS ARE THE ASSESSEE FOR THE ASSESSMENT YEAR 2004-2005 HAD FILED ITS ORIGINAL RETURN WITHIN THE DUE DATE ON 31.10.2004 BEFORE THE ASSESSING OFFICER AT NEW D ELHI. THE REVISED RETURN FOR THE ASSESSMENT YEAR 2004-2005 WAS ALSO FILED AT NEW DELHI ON 31.10.2005, WHICH IS WITHIN THE TIM E PRESCRIBED UNDER SECTION 139(5) OF THE ACT. THOUGH, IN THE MEA NWHILE THE ASSESSEE HAD SHIFTED ITS REGISTERED OFFICE FROM NEW DELHI TO HYDERABAD AND IN FACT, HAS FILED ITS RETURN OF INCOM E FOR THE ASSESSMENT YEAR UNDER DISPUTE AT HYDERABAD ON 1.11.20 05 BUT THERE IS SOME JUSTIFICATION ON THE PART OF THE ASSES SEE IN FILING THE REVISED RETURN FOR THE ASSESSMENT YEAR 2004-2005 AT DELHI SINCE THE ORIGINAL RETURN FOR THE SAID ASSESSMENT YEAR WAS ALSO FILED AT DELHI. THAT APART WHEN THE REVISED RETURN HAS BEEN FILED WITHIN THE TIME PRESCRIBED UNDER SECTION 139(5), IT CANNOT BE TREATED AS INVALID ONLY BECAUSE IT WAS FILED IN NEW DELHI AND N OT IN 5 HYDERABAD, THOUGH BEFORE THE SAME INCOME TAX DEPARTM ENT. IT IS FURTHER REVEALED FROM THE ORDER OF THE CIT(A) THAT INITIALLY HE HAD INSTRUCTED THE ASSESSING OFFICER TO OBTAIN INFORMAT ION FROM HIS COUNTERPART AT NEW DELHI WITH REGARD TO THE REVISED RETURN FILED AT NEW DELHI. JUST BECAUSE THE ASSESSING OFFICER FA ILED TO OBTAIN ANY INFORMATION FROM HIS OWN DEPARTMENT IN NEW DELHI , THE CIT(A) WITHOUT MAKING ANY FURTHER ENQUIRY IN RESPECT OF THE REVISED RETURN CANNOT SIT BACK AND DECLARE THE REVI SED RETURN FILED WITHIN THE PRESCRIBED TIME TO BE A INVALID RE TURN. THE REVISED RETURN HAVING BEEN FILED WITHIN THE TIME PRESCRIBED UNDER SEC. 139(5), IN OUR VIEW, IS CERTAINLY A VALID RETURN AND THE VALIDITY AND LEGALITY OF THE CLAIM MADE IN THE SAID REVISED R ETURN REQUIRES TO BE CONSIDERED IN ACCORDANCE WITH THE STATUTORY PR OVISIONS. SINCE, NEITHER THE ASSESSING OFFICER NOR THE CIT(A) HAVE CONSIDERED THE REVISED RETURN FILED FOR THE ASSESSM ENT YEAR 2004- 2005 ON 31.10.2005 AT NEW DELHI, WE REMIT THE MATTE R BACK TO THE ASSESSING OFFICER TO DECIDE THE ISSUE AFRESH AN D IN ACCORDANCE WITH LAW AFTER CONSIDERING THE CLAIM MAD E BY THE ASSESSEE IN THE REVISED RETURN FILED FOR THE ASSESS MENT YEAR 2004- 2005 AT NEW DELHI ON 31.10.2005. WHILE DOING SO, TH E ASSESSING OFFICER SHALL ALSO KEEP IN VIEW THE PROVISION CONTA INED UNDER SECTION 157 OF THE ACT. NEEDLESS TO MENTION THE ASS ESSING OFFICER SHALL AFFORD A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE DECIDING THE ISSUE. 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON: 11.0 9.2013 SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD DATE 11 TH SEPTEMBER, 2013. VBP/- 6 COPY TO 1. M/S. TAIKO CHANDERNAGAR CHEMICALS PVT. LTD. 6A, P & T COLONY, KHARKHANA, SECUNDERABAD 500 009. PAN AAACT3663R C/O. DR. C.P.RAMASWAMY, ADVOCATE, FLAT NO. 303, GITANJALI APTS., PLOT NO.108, SRINAGAR COLONY, HYDERABAD 500 072. 2. ACIT, CIRCLE 2 (3), HYDERABAD 3. CIT(A) - III, HYDERABAD. 4. CIT - II , HYDERABAD 5. DR , ITAT, HYDERABAD A BENCH , HYDERABAD.