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2019 (6) TMI 657

nefit of set off against the business income in the subsequent assessment years can be allowed to assessee in the absence of such claim in the return of income? - HELD THAT:- Where as a consequence to the order of Appellate Authority, the assessee has received relief which has the cascading effect on subsequent assessment years, the Assessing Officer is duty bound to give effect to the said order in later affected assessment. We do not find merit in the observations of CIT(A) that in the absence of claim of set off of brought forward business loss in the return of income the same cannot be allowed to the assessee. The CIT(A) while making such observations has failed to consider the fact that the assessee in its return of income had declared .....

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common order. Since, in all these appeals the facts are identical, for the sake of convenience the facts are extracted from the appeal in ITA No. 2396/PUN/2017 for the assessment year 2003-04. ITA No. 2396/PUN/2017 (A.Y. 2003-04) Facts of the case 2. The issue raised in the appeal has its genesis in assessment year 2002-03. The assessee is a State Government Undertaking engaged in providing warehouse facilities in the State of Maharashtra. The assessee filed its return of income for the assessment year 2002-03 declaring Nil income. The assessment was completed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide order dated 31-05-2005 and the total income was assessed at ₹ 5,90,35,236/-. In the assessment .....

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order, the assessee filed appeal before the Tribunal in ITA No. 1140/PUN/2012. The Tribunal vide order dated 25-08-2014 set aside the order of Commissioner of Income Tax passed u/s. 263 of the Act. The Assessing Officer in proceedings to give effect to the order of Tribunal, vide order dated 11-11-2014 for assessment year 2002-03 restored the business losses of the assessee at ₹ 13,00,25,239/-. Thus, in effect the assessment order dated 14-12-2009 passed u/s. 143(3) r.w.s. 254 was restored. 2.3 Thereafter, the assessee filed application u/s. 154 of the Act for the assessment years 2003-04 to 2006-07 to allow the benefit of carry forward of business loss determined by Assessing Officer in consequent to the directions of Tribunal in ass .....

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t year 2002-03, the assessee had already filed its return of income for the assessment years under appeal (i.e. assessment years 2003-04 to 2006-07). Hence, there was no occasion for the assessee to claim set off of brought forward losses in the return of income. The ld. AR further submitted that the provisions of section 153(3) clearly states that the time limit as set out in sub-section (1) and subsection (2) for the completion of assessment, reassessment and recomputation would not apply where the fresh assessment is made in pursuance to the order u/s. 254 or section 263 or section 264 of the Act. 3.1 The ld. AR further contended that the provisions of section 71 merely states that where the assessee in the computation of income under an .....

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not claimed set off of brought forward business loss. Without claiming the same in the return of income the Assessing Officer cannot accept the claim of assessee. The assessee cannot by merely filing rectification petition u/s. 154 claim set off of brought forward losses without claiming the same in return of income. Findings of the Tribunal 5. We have heard the submissions made by representatives of rival sides and have perused the orders of authorities below. The factual matrix of case has already been explained in para 2 above. The same are not in dispute. The solitary issue that emerges for adjudication in this appeal is; Whether the business loss arrived at by the Assessing Officer while giving effect to the order of Tribunal can be ca .....

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horities. The provisions of sub-section (3) as they were applicable to the assessment year under appeal are reproduced herein- below : (3) The provisions of sub-sections (1), (1A), (1B) and (2) shall not apply to the following classes of assessments, reassessments and recomputations which may, subject to the provisions of sub-section (2A), be completed at any time- (i) [***] (ii) where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 250, 254, 260, 262, 263, or 264 [or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act ; (iii) where, in the case of a firm, an .....

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l grounds not merely in terms of legal submissions but also additional claims to wit claims not made in the return filed by it. 9. Thus, in view of the facts of the case and the provisions of the Act, we hold that the assessee is eligible for claiming the benefit of set off of brought forward business loss in the impugned assessment years. Accordingly, the impugned order is set aside and the appeal of assessee is allowed. ITA Nos. 2397 to 2399/PUN/2017 (A.Ys. 2004-05 to 2006-07) 10. Both the sides are unanimous in stating that the facts and the grounds of appeal raised in ITA Nos. 2397 to 2399/PUN/2017 are identical to the grounds raised in ITA No. 2396/PUN/2017. Thus, in view of the fact that the issue in all the appeals is identical and i .....

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