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2019 (12) TMI 155

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..... That being the position, the AO ought to have evaluated the claim made by the assessee for write-off of liability by Canara Bank in its favour amounting to ₹ 1,36,45,525/-, and should not have rejected the same merely on the ground of it being raised for the first time. The reliance placed by the Tribunal SAHELI SYNTHETSICS P. LTD. VERSUS COMMISSIONER OF INCOME-TAX [2008 (2) TMI 182 - GUJARAT HIGH COURT] is misplaced in the light of the scope and nature of remand in the present case. The finding returned by the Tribunal in paragraphs 8, 9 and 12 of the impugned order are erroneous since the Tribunal has not appreciated the scope and nature of the remand ordered by it by its earlier order dated 10.03.2011. Answer the questions framed a .....

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..... ncome Tax Act on 30.03.2005. Eventually, on 07.01.2009, the Income Tax Appellate Tribunal (ITAT) set aside the matter to the file of the Assessing Officer to adjudicate afresh after considering the documents and submissions of the assessee. The Assessing Officer then passed a fresh assessment order on 01.12.2009 under Section 143(3) read with Section 254 of the Act, making certain additions and disallowances. The said order was upheld by the CIT (A) on 20.10.2010. 3. On further appeal, once again, the ITAT vide order dated 10.03.2011, set aside the matter to the file of the Assessing Officer with a direction to reframing a fresh assessment. While passing this order, the Tribunal observed in paragraph 5 as follows: 5. We have heard rival sub .....

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..... nd reasonable approach as warranted by law has to be adopted by lower authorities, which the AO will keep in mind while reframing the assessment. We order accordingly. 4. On this occasion, the Assessing Officer deleted the additions and the disallowances made in the first two rounds. A fresh addition of ₹ 40,045/- was made towards late deposit of employees contribution towards PF and ESI, and brought forward losses to the extent of ₹ 2,14,35,459/- were not allowed to be set off. The assessee made a fresh claim regarding nontaxability of income arising from write-off of liability by Canara Bank in its favour amounting to ₹ 1,36,45,525, which earlier had been offered to tax as income. The Assessing Officer without examining .....

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..... as same should not be treated as income of the assessee. The question before us is whether the assessee should be allowed to make fresh claim of deduction in remand proceedings and that too in second round of remand by the Tribunal. 6. The Tribunal went on to answer the question raised by it against the assessee by placing reliance on a decision of the Gujarat High Court in Sehet Synthetics P. Ltd. v. CIT, 302 ITR 126. 7. The submission of learned counsel for the appellant is that a perusal of the order of remand dated 10.03.2011 would show that the ITAT had completely set aside the assessment order on a fundamental premise, namely, on finding the approach of the lower authorities - which included the Assessing Officer, to be highly unjust .....

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..... and ESI, and could not have disallowed set-off of the brought forward losses to the extent of ₹ 2,14,35,459/. 9. On the other hand, Ms. Malhotra submits that the Assessing Officer had not examined the merits of the fresh claim made by the assessee regarding non-taxability of income arising from write-off of liability by Canara Bank in its favour amounting to ₹ 1,36,45,525/-, on the threshold objections that in remand proceedings a fresh claim could not be raised by the assessee. 10. Having heard learned counsels and perused the impugned order as well as the order dated 10.03.2011 passed by the ITAT in ITA No. 04/Del/2011 preferred by the assessee, it is clear to us that the remand made by the Tribunal to the Assessing Officer v .....

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