GI ENGINEERING SOLUTIONS LTD, MUMBAI V. ASST CIT CIR 8(1), MUMBAI

ITA 867/MUM/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62351 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Appeal Filed On: 09-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Keywords: Business income; Depreciation; Revised return; Unabsorbed depreciation
• Section: 115JB; 10

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI D. MANMOHAN (VICE PRESIDENT) AND SHRI N.K. BILLAIYA (ACCOUNTANT MEMBER) ITA NO. 867/MUM/2012 ASSESSMENT YEAR-2009-10 M/S. GI ENGINEERING SOLUTIONS LTD., 73A, SF-III, SEEPZ, ANDHERI(E), MUMBAI-400 096 PAN-AACCG 9185D VS. THE ACIT, CIRCLE-8(1), AAYAKAR BHAVAN, MUMBAI-400 020 (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SATISH MODY RESPONDENT BY: SHRI A.K. NAYAK DATE OF HEARING : 18.04.2012 DATE OF PRONOUNCEMENT: 30.4.2012 O R D E R PER N.K. BILLAIYA (AM): THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2009-10 AGAINST ORDER OF LD. CIT(A)-16 DT. 23.01.2012. 2. THE ASSESSEE HAS RAISED 2 GROUNDS OF APPEAL WHIC H READ AS UNDER: 1. THE CIT(A) ERRED IN UPHOLDING THE AOS ORDER F OR MAKING ADDITION OF PROFIT OF 10A UNIT LOCATED IN SEZ MUMBA I, TO ARRIVE AT THE BOOK PROFIT U/S. 115JB OF THE ACT, IN RESPECT O F ON THE GROUND OR GROUNDS AS ALLEGED IN THE ASSESSMENT ORDER. 2. THE CIT(A) ERRED IN UPHOLDING THE AOS ORDER OF NOT ALLOWING TO SET OFF THE BROUGHT FORWARD ASSESSED BUSINESS LO SS AND UNABSORBED DEPRECIATION AGAINST THE CURRENT YEARS INCOME ON THE GROUND OR GROUNDS AND IN THE CIRCUMSTANCES OF THE C ASE AND LAW. 2 3. AT THE VERY OUTSET, LD. COUNSEL APPEARING FOR TH E ASSESSEE SUBMITTED THAT GROUND NO. 1 IS NOT PRESSED. THEREFORE GROUND NO. 1 OF APPEAL IS REJECTED. 4. GROUND NO. 2 OF THE APPEAL, THE ASSESSEE HAS SHO WN ITS GRIEVANCE AGAINST ADDITION MADE BY AO FOR NOT ALLOWING TO SET OFF OF THE BROUGHT FORWARD ASSESSED BUSINESS LOSS AND UNABSORBED DEPRECIATION. 5. THE FACTS OF THE CASE ARE THAT ASSESSEE IS A PUB LIC LIMITED COMPANY, ENGAGED IN THE BUSINESS OF INFORMATION TECHNOLOGY, ENGINEERING AND OTHER RELATED SERVICES. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED IT S RETURN ON 29.9.2009 DECLARING TOTAL INCOME AT RS. NIL AFTER CLAIMING DEDUCTION U/S. 10 A OF THE ACT AMOUNTING TO RS. 39,09,967/- AND CLAIMING OF SET OFF OF BROUGHT FORW ARD LOSSES OF RS. 38,20,577/-. THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT AND ACCOR DINGLY NOTICE U/S. 143(1) & 143(2) OF THE ACT WAS ISSUED AND SERVED TO THE ASSESSEE CO MPANY. 6. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COMPANY FILED REVISED COMPUTATION OF INCOME DECLARING TOTAL INCOM E AT RS. NIL AFTER CLAIMING SET-OFF OF BROUGHT FORWARD LOSSES OF EARLIER YEARS TO THE EXT ENT OF INCOME AVAILABLE OF RS. 77,30,544/-. THE REVISED COMPUTATION OF INCOME, TH E ASSESSEE WITHDREW ITS CLAIM FOR DEDUCTION U/S. 10A OF THE ACT. THE ASSESSING OFFIC ER AFTER DISCUSSING AT LENGTH COMPUTATION OF PROFIT U/S. 115JB OF THE ACT RECOMPU TED THE BOOK PROFIT OF THE ASSESSEE AS UNDER: NET PROFIT AS PER P&L A/C RS. 65,37,175/- ADD: PROVISION FOR INCOME TAX RS. 3,93,500/- BOOK PROFIT U/S. 115JB RS. 69,30,675/- ROUNDED OFF TO RS. 69,30,680/- ` ========== THE BOOK PROFIT U/S. 115JB OF THE ACT ASSESSED AT RS. 69,30,680/- AND WENT ON TO COMPUTE THE TOTAL INCOME OF THE ASSESSEE COMPANY IS AS UNDER: 3 INCOME FROM BUSINESS- AS PER REVISED COMPUTATION PROFIT FROM UNDERTAKING AT SEEPZ RS. 39,09,967/- INCOME FROM OTHER SOURCES INTEREST INCOME RS. 38,20,577/- TOTAL INCOME RS. 77,30,544/- ROUNDED OFF U/S. 288A RS. 77,30,540/- ========== BOOK PROFIT U/S. 115JB AS DISCUSSED IN PARA 3 TO 3.5 RS. 69,30,680/- ========== AS 10% OF BOOK PROFIT WAS LESS THAN THE TAX PAYABL E ON THE INCOME ASSESSED, THE AO CONCLUDED THAT PROVISIONS OF SECTION 115JB O F THE ACT DOES NOT APPLY IN THE INSTANT CASE. THEREFORE, FOR THE PURPOSE OF TAXATI ON, TOTAL INCOME WAS TAKEN AT RS. 77,30,540/-. 7. AGGRIEVED BY THE ORDER OF AO, ASSESSEE COMPANY S HOWN ITS GRIEVANCE BEFORE LD. CIT(A). 8. THE MAIN CONTENTION BEFORE THE LD. CIT(A) WAS TH AT THE AO HAS NOT ALLOWED THE CLAIM OF SET OFF OF BROUGHT FORWARD LOSSES AND UNAB SORBED DEPRECIATION AT RS. 77,30,544/-. 9. THE LD. CIT(A) GAVE HIS FINDINGS AS UNDER: FURTHER, I FIND THAT THE ISSUE OF SET OFF OF ASSES SED BROUGHT FORWARD BUSINESS LOSS AND UNABSORBED DEPRECIATION WITH THE CURRENT YEARS BUSINESS INCOME HAS NOT BEEN DISCUSSED BY THE LD. AO IN HIS ORDER. THEREFORE, THE ISSUE CANNOT BE DELIBERATED UPON AS IT IS SEEN THAT THE APPELLANT HIMSELF HAS NOT CLAIMED THE SAME EITHER IN HIS REVISED RETURN OR IN THE ORIGINAL RETURN. THEREFORE, THIS GROUND OF APPEAL IS ACCORDINGLY DISMISSED. 4 10. AGGRIEVED BY THE DECISION OF LD. CIT(A), ASSESS EE IS IN APPEAL BEFORE US. 11. THE LD. COUNSEL APPEARING FOR THE ASSESSEE REIT ERATED THAT THE ASSESSEE HAS FILED ITS REVISED COMPUTATION OF INCOME DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF. IN THE REVISED COMPUTATION OF INCOME, THE ASSESSEE CLAIMED SET OFF OF BROUGHT FORWARD LOSSES OF EARLIER YEARS TO THE EXTENT OF INCOME AV AILABLE OF RS. 77,30,544/-. THE LD. AR PRAYED THAT THE ISSUE OF SET OFF OF BROUGHT FORWARD LOSS HAS TO BE DECIDED FIRST. 12. THE LD. DEPARTMENTAL REPRESENTATIVE AGREED WITH THIS SUBMISSION OF LD. AR. 13. WE HAVE CAREFULLY PERUSED THE ORDERS OF LOWER A UTHORITIES. WE FIND THAT IN THE BODY OF ASSESSMENT ORDER, THE AO HAS MENTIONED ABOU T THE REVISED COMPUTATION OF INCOME AND THE SET OF CLAIM BY ASSESSEE OF BROUGHT FORWARD LOSS OF EARLIER YEARS AT RS. 77,30,544/-. IT APPEARS THAT THIS FACT HAS NOT BEE N CONSIDERED BY LD. CIT(A) AT ALL. WE THEREFORE, RESTORE THIS MATTER BACK TO THE FILE OF AO. THE AO IS DIRECTED TO EXAMINE THE CLAIM OF THE ASSESSEE COMPANY ABOUT SET OFF OF BROU GHT FORWARD LOSSES OF RS. 77,30,544/- AFTER GIVING DUE OPPORTUNITY OF HEARIN G TO THE ASSESSEE. HERE, WE WOULD LIKE TO MAKE IT CLEAR THAT THE MATTER IS RESTORED B ACK ONLY FOR THIS LIMITED PURPOSE. 14. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 30 TH DAY OF APRIL, 2012. (D. MANMOHAN) (N.K. BILLAIYA ) VICE-PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED 30 TH APRIL, 2012 RJ 5 COPY TO : THE APPELLANT THE RESPONDENT THE CIT-CONCERNED THE CIT(A)-CONCERNED THE DR G BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, I.T.A.T, MUMBAI