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COMMISSIONER OF INCOME TAX, KOLKATA-IV Versus ALCOVE INDUSTRIES LIMITED

2015 (9) TMI 230 - CALCUTTA HIGH COURT

Reverse of ex parte order passed by ITAT - whether such change of opinion is sustainable in law? - Held that:- Admittedly Paper Book filed by the appellant does not contain the Miscellaneous Petition filed by the respondent before the Tribunal for recalling the order dated 21st February, 2003 and the order passed thereon. As it appears that the Tribunal had recalled the order dated 21st February, 2003 and had proceeded to hear the appeal afresh after giving notice to the parties and had passed t .....

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r view since the project was abandoned in the assessment year 1995-96 and the entire expenses was written off during the said assessment year, the issue stands covered by the judgment in Binani Cements [2015 (3) TMI 849 - CALCUTTA] wherein it was held that “The decision to abandon the project was the cause for claiming the deduction. The decision was taken in the relevant year. It can therefore be safely concluded that the expenditure arose in the relevant year. - Decided in favour of the assess .....

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st on any loan or advance or any sum payable by the assessee as an employee in lieu of any leave at the credit of his employer or any sum payable as interest on any loan or borrowing from any public financial institution in accordance with the terms and conditions, which does not have any bearing on the subject matter in issue, and as we find that the Tribunal, while allowing the matter had directed the Assessing Officer to verify whether the claim of ₹ 4,60,000/- is already embedded in th .....

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against the order dated 30th April, 2004 passed by the Income Tax Appellate Tribunal, Kolkata in ITA Nos. 915 and 916 9Kol) of 1999 for the assessment years 1995-96 and 1996-97. The appeal was admitted on the following substantial questions of law: (i) Whether the I.T.A.T. erred in law in reversing its own ex parte order passed in the matter based on the identical issue and existing facts and whether such change of opinion is sustainable in law? (ii) Whether the Income Tax Appellate Tribunal was .....

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.N. Dutta, learned Advocate for the appellant that the Tribunal, by the order under appeal, erred in law in reversing in its own order passed in the matter based on the facts on record and thus it was a change of opinion. Submission is as the Tribunal by the order dated 21st February, 2003 had turned the plea of the assessee, the order passed subsequently on 30th April, 2004 allowing deduction of the expenditure incurred was illegal. Mrs. Anupa Banerjee, learned advocate for the respondent submi .....

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rlidhar Sarda; (1975) 99 ITR 485 (Cal) and Khaitan Paper & Industries Ltd. vs. Commissioner of Income-tax; (2005) 148 Taxman 326 (Cal), as the settled position of law is the Tribunal has the power to restore and rehear an appeal already disposed of on merits and as in the instant case it is evident from the documents filed that the assessee was prevented by sufficient cause from not appearing before the Tribunal, the Tribunal was justified in recalling the order and rehearing the appeal. Let .....

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nd had passed the impugned order, in view of the law laid down in Income Tax Officer vs. Murlidhar Sarda (supra) and in Khaitan Paper & Industries Ltd (supra), the question no.(i) is answered in the negative, against the Revenue and in favour of the assessee. So far as the question no.(ii) is concerned, it is submitted by Mr. Dutta that as under the law loss has to be set off against the income in that assessment year, the Tribunal erred in law in setting off the said loss against the assess .....

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erjee relying on the judgment in Binani Cement Ltd. vs. CIT: (2015) 277 CTR (Cal) 49 submits that since deduction of expenses as deferred revenue expenses was accepted by the Assessing Officer in earlier two assessment years and such expenditure was allowed to be spread over and as in the instant year the project was abandoned and assessee as a prudent businessman had written off the entire balance expenditure, the Tribunal was justified in confirming the order of the CIT(A). Since the Assessing .....

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it was abandoned. The entire expenses were written off during the year. However the Assessing Officer disallowed the expenditure as it was not related to the current year s income. The Assessing Officer, held that the income or loss for a particular year has to be determined after taking into account the expenses incurred to earn the profit and there should direct nexus between the income and the expenses of that particular year. However, in appeal, the CIT (A) found that in the assessment year .....

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