TMI Blog2015 (11) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... y way affect the inter-head adjustments specified under section 71 of the Act nor the application of specific bar contained under subsection (2A) thereof.Assessing Officer as well as the Commissioner(Appeals) were justified in disallowing set off of unabsorbed depreciation from earlier years against salary income. Accordingly, we are of the opinion that the CIT(A) is justified in disallowing set off of unabsorbed depreciation from earlier years against income from other sources. - Decided against assessee. - ITA No. 1389/Mds/2015 - - - Dated:- 30-9-2015 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER For The Appellant : Shri A.S.Sriraman, Advocate For The Respondent : Shri A.B. Koli, JCIT ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER This appeal by the assessee is directed against the order of the Commissioner of Income-tax(Appeals) dated 31.3.2015. 2. The facts of the case are that the original assessment in this case was completed on 31.12.2009 u/s.143(3) of the Act determining the income at ₹ 20 lakhs. Later on it was noticed that the assessee company claimed unabsorbed depreciation loss of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The participation in this proceedings would not confer automatic jurisdiction as well as would not validate the re-assessment proceedings in as much as with a view to protect our interest and discharge our legal obligation we are responding to the notices/letters issued in this connection. The AO rejected the objections and added ₹ 1.22 lakhs and depreciation of earlier year was not lowed to be set off against the income of ₹ 1,22,50,000/-. Against this, the assessee went in appeal before CIT(appeals), who dismissed the appeal of the assessee. Aggrieved, the assessee is in appeal before us. 3. According to the ld. AR, there was no tangible fresh material to reopen the assessment and the original assessment was completed u/s.143(3) on 31.3.2009. When the assessment was reopened by issuing notice u/s.148 on 13.9.2012, though it was within four years at the end of the relevant assessment year, the Assessing Officer cannot reopen the assessment without any fresh material came to his possession. According to the ld. AR, reopening of the assessment is nothing but a review of earlier assessment . He relied on the judgment of the Supreme Court in the case of Kelvinato ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l evidence. In the given case, there was no assessment. The argument of the ld.AR is that u/s 147 no action could be taken unless the assessee has not disclosed fully and truly all material facts necessary for the assessment for that assessment year. 7.1 As seen from the reasons recorded, give a clear picture that the Assessing Officer has got material evidence to form his opinion for taking recourse to section 147 r.w.s 148 of the Act. There cannot be two opinions. The point of time when the reasons are recorded after forming opinion of escapement of income is only relevant. Hence, this plea of the ld.AR is not tenable in the eyes of law. It is true that u/s 147, the Assessing Officer can either assess or re-assess but for taking action thereunder, he has to record reasons that income chargeable to tax has escaped assessment. It is also mandated by section 148(2) to record reasons in writing. The reassessment proceedings u/s 147 are further subject to sections 148, 149, 150, 151, 152 and 153. But in the present case, we are required to decide the limited issue regarding the validity of proceedings undertaken within four years from the end of the relevant assessment year in qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ither no sum is payable by the assessee, or (b) no refund is due to him. It is significant that the acknowledgement is not done by any Assessing Officer, but mostly by ministerial staff. It cannot therefore be said that an assessment is done by them. The intimation under section 143(1)(a) was deemed to be a notice of demand under section 156 for the apparent purpose of making machinery provisions relating to recovery of tax applicable. By such application only recovery indicated to be payable in the intimation became permissible. Nothing more can be inferred from the deeming provisions. Therefore, there being no assessment under section 143(1)(a), the question of change of opinion does not arise. Held accordingly, that the Assessing Officer had jurisdiction to issue notice under section 148 for bringing to tax income escaping assessment in an intimation under section 143(1)(a) on the ground that the claim for bad debts by the assessee was not acceptable as the conditions for allowance specified in section 36(1)(vii) and (2) were not fulfilled. 8. In the present case, the assessee has claimed set off of unabsorbed depreciation of previous years against unexplained cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading loss in the hands of the assessee. Whereas, in the case of the assessee, there is no dispute that the assessee incurred loss under the head business in trading of shares and the assessee made certain cash deposits into his savings bank account for which the assessee could not explain the source. Therefore, since the assessee could not prove the source for such cash deposits in to savings bank account, the same are assessable under the head income from other sources and the losses from business are to be allowed as set off against the income from other sources in accordance with the section 71 of the Act. Therefore, the counsel for the assessee submits that the addition of ₹ 30.00 lakhs made by the Assessing Officer is also an income and cannot be excluded from the total income of the Act and therefore, shall be chargeable under the head other sources . The counsel further submitted that as per section 4 of the I.T. Act, the income tax is payable on the total income of the previous year of every person. He submitted that section 5 defines the scope of total income and as per section 14, all the income shall, for the purpose of charge of income tax and computation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that the deemed income also shall be assessable under any one of head specified u/s.14 of the Act. In the case of CIT v. Shilpa Dyeing Printing Mills (P) Ltd. 381 DTR (Guj) 381 wherein it was held that: Section 71 permits assesse to set off loss other than that of capital gains against income from other head. Thus, statutory provisions contained in Section 71 was applicable in present case. Revenue s appeal dismissed. The ld. AR also relied on the judgment of the Madras High Ccourt In the case of CIT v. Chensing Ventures (291 ITR 258) 11. The ld. DR relied on the orders of the lower authorities and the judgment of the Gujarat High Court in the case of Fakir Mohmed Haji Hasan v. CIT (supra). 12. We have heard both the parties and perused the material on record. Placing reliance by the assessee s counsel on the judgment of the Tribunal in the case of Shri P. Subramanian v. ITO in TA No.1363/Mds/10 is totally misplaced. In that case, the issue before the tribunal was that whether the business loss computed under the head profit and loss account of business could be set off against the income assessed as unexplained u/s.69 of the Act. The Tribunal considered t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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