DCIT, Circle -7, Kolkata, Kolkata V. M/s Mangalam Fashions Ltd., Kolkata

ITA 734/KOL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91895 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 08-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DILIP KUMAR RAKSHIT
• Assessee Lawyers: S L KOCHAR; ANIL KOCHAR ADVOCAT
• Keywords: Business income; Depreciation; Unabsorbed depreciation
• Section: 147; 154; 143(3)

Judgement Text

I.T.A. NO . 73 4 / KOL ./201 2 ASSESSMENT YEAR: 200 3 - 20 0 4 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.K. BANSAL , ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH , JUDICIAL MEMBER I.T.A. NO. 73 4 / KOL / 20 1 2 ASSESSMENT YEAR : 200 3 - 20 0 4 DEPUTY COMMISSIONER OF INCOME TAX,... .... ......... .... ... .. .APP ELL ANT CIRCLE - 7 , KOLKATA, AAYAKAR BHAWAN, 5 TH FLOOR, ROOM NO. 15, P - 7, CHOWRINGHEE SQUARE, KOLKATA - 700 069 - VS. - M/S. MANGALAM FASHIONS LIMITED, .............. ... . RESPONDENT 22, CAMAC STREET, KOLKATA - 700 016 [PAN : AAC CM 9294 P ] APPEARANCES BY: SHRI D ILIP K UMAR RAKSHIT, JCIT, SR. D.R., FOR THE DEPARTMENT SHRI S.L. KOCHAR & SHRI ANIL KOCHAR, ADVOCATE , FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : APRIL 0 8 , 2 01 5 DATE OF PRONOUNCING THE ORDER : APRIL 08 , 201 5 O R D E R PER P.K. BANSAL : THIS A PPEAL HAS BEEN FILED BY THE REVENU E AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - V III , KOLKATA IN APPEAL NO. 317 /CIT(A) - V III / KOL/ 10 - 1 1 D ATED 0 2 . 0 2 .201 2 FOR THE ASSESSMENT YEAR 200 3 - 0 4 BY TAKING THE FOLLOWING EF FECTIVE GROUND OF APPEAL: - T HAT U N DER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS IN FACTS IN ALLOWING BUSINESS LOSS OF RS.27,50,334/ - COMPUTED VIDE ORDER UNDER SECTION 154/ 143(3) DATED 21.07.2006 . I.T.A. NO . 73 4 / KOL ./201 2 ASSESSMENT YEAR: 200 3 - 20 0 4 PAGE 2 OF 3 2 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSMENT UNDER SECTION 143(3 ) WAS FRAMED BY THE ASSESSING O FFICER VIDE ORDER DATED 15.12.2005 DETERMINING THE TOTAL INCOME AT RS.43,78,280/ - WHICH CONSISTS OF BUSINESS PROFIT AT RS.70,12,255/ - , HOUSE PROPERTY INCOME AT RS.20,85, 308/ - OUT OF WHICH BROUGHT FORWARD UNABSORBED DEPRECIATION WAS ALLOWED SET OFF TO THE EXTENT OF RS.47,19,284/ - . SUBSEQUENTLY AN APPLICATION UNDER SECTION 154 WAS MADE BY THE ASSESSEE ON 02.02.2006 AND THEREAFTER THE ASSESSING O FFICER ALLOWED THE ASSESSEE S ET OFF OF UNABSOR BE D BUSINESS LOSS AS WELL AS UNABSORBED DEPRECIATION TOTALLING TO RS.70,12,255/ - AND BUSINESS INCOME WAS DETERMINED AT NIL WHILE THE HOUSE PROPERTY INCOME REMAINED AT RS.20,85,308/ - . SUBSEQUENTLY PROCEEDINGS UNDER SECTION 147 WERE INITIAT ED BY THE ASSESSING OFFICER AND IN CONSEQUENCE THEREOF , ASSESSMENT ORDER WAS PASSED ON 31.12.2010 DETERMINING THE TOTAL INCOME AT RS.43,78 ,379/ - ALLOWING THE UNABSORBED DEPRECIATION TO THE EXTENT OF RS.47,19,284/ - AS SET OFF AGAINST THE TOTAL INCOME. THE A SSESSEE WENT IN APPEAL BEFORE THE LD. CIT(APPEALS). LD. CIT(APPEALS) ONLY ON LEGALITY DISMISSED THE GROUND OF THE ASSESSEE ABOUT THE VALIDITY OF THE REASSESSMENT WHILE ALLOW ED THE APPEAL OF THE ASSESSEE ON MERIT. 3. WE HEARD THE RIVAL SUBMISSIONS AND CARE FULLY CONSIDERED THE SAME ALONG WITH THE ORDER OF THE TAX AUTHORITIES BELOW. THE ONLY ISSUE BEFORE US IS THAT THE ASSESSING OFFICER ALLOWED SET OFF OF BROUGHT FORWARD BUSINESS LOSS OF RS.27,50,334/ - RELATING TO THE ASSESSMENT YEAR 20 0 1 - 02. WE NOTED THAT THE ASSESSING O FFICER HAS DISALLOWED THE CLAIM MAINLY ON THE GROUND THAT THE BUSINESS INCOME FOR THE ASSESSMENT YEAR 2001 - 02 WAS ASSESSED AS NIL. BUT FROM THE ASSESSMENT ORDER AS IS APPARENT THE ASSESSING OFFICER HAS ADOPTED THE BUSINESS INCOME AS PER ORIGINA L ASSESSMENT AND HAS NOT BROUGHT ANY COGENT MATERIAL ON RECORD WHICH MAY PROVE THAT THE CLAIM OF THE ASSESSEE IN THE APPLICATION MADE UNDER SECTION 154 WAS PATENTLY INCORRECT. IN VIEW OF THIS FACT, IN OUR OPINION, THE LD. CIT(APPEALS) WAS CORRECT IN LAW IN DIRECTING THE ASSESSING OFFICER TO RE - COMPUTE THE TOTAL INCOME AS COMPUTED IN THE ORDER PASSED UNDER SECTION I.T.A. NO . 73 4 / KOL ./201 2 ASSESSMENT YEAR: 200 3 - 20 0 4 PAGE 3 OF 3 154 AND ALSO FURTHER DIRECTING HIM TO VERIFY THE WORKING OF CARRY FORWARD BUSINESS LOSS AND UNABSORBED LOSS FOR THE ASSESSMENT YEAR 2001 - 02 ONWARD S AND MODIFY THE SAME, IF NECESSARY. WE, THEREFORE, CONFIRM THE FINDING OF THE LD. CIT(APPEALS). 4 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH APRIL , 201 5 . SD/ - SD/ - MAHAVIR SINGH P.K. BANSAL ( JUDICIAL MEMBER) ( ACCOUNTANT MEMBER) KOLKATA, THE 08 TH D AY OF APRIL , 201 5 COPIES TO : (1) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 7, KOLKATA, AAYAKAR BHAWAN, 5 TH FLOOR, ROOM NO. 15, P - 7, CHOWRIN GHEE SQUARE, KOLKATA - 700 069 (2) M/S. MANGALAM FASHIONS LIMITED, 22, CAMAC STREET, KOLKATA - 700 016 (3) COMMISSIONER OF INCOME - TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX ( 5 ) THE DEPARTMENTAL REPRESENTATIVE ( 6 ) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA B ENCHES, KOLKATA LAHA/SR. P.S .