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2015 (10) TMI 13 - ITAT CHENNAI

2015 (10) TMI 13 - ITAT CHENNAI - TMI - Disallowance under section 36(1)(vii) - provision of doubtful advance - Held that:- Assessee in fact had disallowed both the provision for doubtful debts of ₹ 31,12,318/- and provision for doubtful advances of ₹ 38,54,270/- while computing income for the assessment year 2006-07. Thus, we direct the Assessing Officer to delete the disallowance made in respect of provision for doubtful advance of ₹ 38,54,270/- as the assessee itself had dis .....

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not. Thus, we restore this issue to the file of the Assessing Officer with a direction to carry out the observations/directions of the Commissioner of Income Tax (Appeals) and ascertain as to whether business loss of the assessment year 1998-99 is carried forward only upto 2006-07 and not beyond that period. - Appeal of assessee allowed partly for statistical purposes. - ITA No. 2369/Mds/2014 - Dated:- 24-7-2015 - Chandra Poojari, AM And Challa Nagendra Prasad, JM, JJ. For the Appellant : Mr R V .....

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el for the assessee at the outset submits that disallowance which was made by the Assessing Officer towards provision for doubtful advance of ₹ 38,54,270/- has already been added back by the assessee in its computation of income filed for the assessment year under consideration. He invited our attention to page 5 of the paper book which is computation filed for the assessment year 2006-07 and submits that assessee has disallowed ₹ 69,66,588/- under section 36(1)(vii) of the Act. Furt .....

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and this ground was not pressed before the Tribunal for the reasons not known. He submits that Tribunal therefore had no occasion to adjudicate on the disallowance of provision for doubtful debts. The issue in question in the present appeal is disallowance for provision for doubtful advance of ₹ 38,54,270/- and since doubtful advance of ₹ 38,54,270/- which was already included in ₹ 69,66,588/- and was disallowed by the assessee in its computation of income, there is no justifi .....

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g reliance on the decision of this Tribunal in not considering the plea of the assessee that provision for doubtful advance of ₹ 38,54,270/- was already considered by the assessee itself in the return of income, appears to be not proper. The Assessing Officer while completing the assessment under section 143(3) read with section 147 of the Act disallowed provision for doubtful advance of ₹ 38,54,270/- rejecting the contention of the assessee that this amount has already included in & .....

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ovision for doubtful advance amounting to ₹ 38,54,270/- is part of ₹ 69,66,588/- and therefore made disallowance. The Commissioner of Income Tax (Appeals) also sustained the disallowance observing that the Tribunal dismissed the appeal of the assessee on a similar addition in respect of provision for doubtful debts which was part of claim of ₹ 69,66,588/-, as the assessee did not press for adjudication of that ground . 6. We have perused the computation of income and the schedu .....

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in its computation. 7. The next issue in the appeal of the assessee is with regard to disallowance of carry forward business loss. Counsel for the assessee referring to page 5 of the order of Commissioner of Income Tax (Appeals) submits that Commissioner of Income Tax (Appeals) directed the Assessing Officer to verify the claim of the assessee that business loss for the assessment year 1998-99 can be carried forward upto assessment year 2006-07 and not beyond that period. However, while giving s .....

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of assessment year 1998-99 till the assessment year 2007-08. 9. Departmental Representative has no serious objection in giving similar direction to the Assessing Officer. 10. Heard both sides. Perused orders of lower authorities. Commissioner of Income Tax (Appeals) with regard to the claim of the assessee in respect of carry forward business loss for the assessment year 1998-99 held as under:- "6.2 Disallowance of carry forward business loss - A.Y. 1998-99 of ₹ 23,47,88,896/- The se .....

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s of AY 1998-99 after adjusting the losses of current year has been carried forward for set off to an extent of ₹ 23147188,896/-. As per the provisions of See 72, the brought forward of a particular AY cannot be carried forward beyond eight successive AYs. In this easel the business toss of AY 1998-99 can be carried forward up to AY 2006-07 only and not beyond that. Hence, the business loss carried forward by the assessee relating to AY 1998-99 has to be disallowed for carry forward. When .....

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of AY 1998-99 has been carried forward till AY 2007-08. We hereby enclose a chart showing the losses to be carried forward wherein it is clearly mentioned that business loss of AY 1998-99 has not been carried forward to AY 2007-08. We have also filed 154 petition before AD on 28.01.2014(copy enclosed). Till date it has not been disposed off. Based on the above submission we pray that appeal be allowed." 6.2.2 I have considered the findings of the Assessing Officer as well as the submissions .....

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