T. Ashok Kumar V. The Deputy Commissioner of Income Tax, Hyderabad

ITTA/42/2014

AI Insights

The case involves T. Ashok Kumar, the appellant, contesting the decision of the Income Tax Appellate Tribunal regarding the non-allowance of a loss carry forward for the assessment year 2010-11. The losses pertained to land that was either gifted or settled in earlier years, specifically 2005-06 and 2004-05, which were not claimed in those respective assessment years. The Tribunal and the court found that since the losses were not claimed in the years they occurred, they could not be carried forward to the assessment year in question. Additionally, the Tribunal ruled that the Commissioner of Income Tax (Appeals) could not extend the consideration of losses to a year where they were not originally claimed.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 796302 (HC-HYDERABAD)
• Appeal Type: Others
• Pronouncement Date: 13-02-2014
• Assessment Year: misc
• Other Referred Cases: Sun Engineering vs. 198 ITR 297, Associated Banking Corporations of India Limited vs. CIT (56 ITR 1)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: K KUMAR
• Keywords: Assessment Year; Closing Stock; Income Tax; Write off; Fresh Claim; Non-existing Land
• Section: 153A

Judgement Text

"HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A.No.42 of 2014 Date: 13.02.2014 Between: T.Ashok Kumar .....Appellant AND The Deputy Commissioner of Income Tax, Hyderabad. ...Respondent HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A.No.42 of 2014 JUDGMENT: (per Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta ) This appeal is sought to be preferred and admitted against the judgment and order of the learned Tribunal dated 27th September 2013 in relation to the assessment year 2010-11 on the following suggested questions of law: (1) On the facts and in the circumstances of the case, whether the Income Tax Appellate Tribunal is right in law in holding that the decision of Supreme Court in the case of Sun Engineering reported in 198 ITR 297 is to the effect that no fresh claim could be entertained in an assessment under Section 153A of the Income Tax Act, 1961, though such obiter applies only to concluded issues? (2) On the facts and in the circumstances of the case, whether the Income Tax Appellate Tribunal is right in law in holding that the Commissioner of Income Tax (Appeals) has to confine himself only to the assessment year in appeal before him and cannot give direction to consider the issue in dispute in another year? (3) On the facts and in the circumstances of the case, whether the Income Tax Appellate Tribunal is right in law in holding that the writing off of value of non-existing land being closing stock is not allowable in the year of write off? We have heard the learned Counsel for the appellant and gone through the judgment and order of the learned Tribunal. The learned Tribunal, after considering the fact and material, came to the conclusion on fact, is as follows: “It is very much clear that the CIT (A) has not disputed the fact that the land to the extent written off was not available to the assessee. However, as noted by him, land to the extent of 2054 square yards gifted to Qutubullapur Municipality and the land to the extent of 5956 square yards settled by virtue of MOU happened in Financial Year 2005-06 relevant to Assessment Year 2006-07. Similarly, loss on account of double entry of land to the extent of 800 square yards in Dandamudi Enclave also pertained to the Assessment Year 2004-05 when the assessee took over the land in the year 2003 itself. It is a fact, not controverted by the assessee, that the losses pertaining to the aforesaid land in question was not claimed in the relevant assessment years. Hence, when the loss on account of unavailability of land does not pertain to the assessment year under dispute and concerning earlier assessment years, which were never claimed as loss in the returns of income filed for those assessment years, the claim of carry forward of such loss cannot be allowed in the impugned assessment year.” The aforesaid finding has not been challenged. On the aforesaid fact, we are unable to appreciate the argument of Mr.K.Vasantkumar, learned Counsel for the appellant, how the loss could be carry forwarded when it was not claiming at all in the returns of income. The learned Tribunal has also distinguished the decision in the case of Associated Banking Corporations of India Limited Vs. CIT (56 ITR 1), wherein the fact of claiming carry forward of such loss was not within the knowledge of the assessee. In this case, it was in the knowledge of the assessee and it did not claim any loss in the returns of income. Mr.K.Vasantkumar, learned Counsel for the appellant, argues that the Commissioner of Income Tax (Appeals) should have directed the Assessing Officer to consider the claim of write off in Assessment Year 2007-08. This issue has also been dealt with by the learned Tribunal, after appreciating the fact, which is quoted hereunder: “As has already been observed earlier, loss of land pertaining to the Assessment Years 2006-07 and 2004-05 and not in Assessment Year 2007-08, hence, no direction can be given for allowing loss in 2007-08 when the assessee has not claimed any loss in the returns filed in 2004-05 and 2006-07. Secondly, the assessment in case of the assessee has been initiated under Section 153A of the Income Tax Act for assessment of undisclosed income as a result of search. Therefore, fresh claim made by the assessee cannot be entertained in a search assessment when such claim has not been made by the assessee originally in the returns filed”. In view of the aforesaid fact-finding, we think that the learned Tribunal has decided the matter on correct proposition of law and also on fact and we do not find any element of law involved in this matter. Accordingly, the appeal is dismissed. No order as to costs. ___________________ K.J. SENGUPTA, CJ __________________ SANJAY KUMAR, J 13.02.2014 Gsn "