TMI Blog2021 (5) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 154 of the Act is a separate order for which assessee need to file appeal separately , but the assessee has failed to do so. The ld CIT(A) has also stated that assessee deserves full sympathetic consideration with regard to condonation of delay in filing appeal against order passed u/s 154 of the Act. . Taking into account the factual position narrated above and to meet the end of justice, we remit this issue back to the file of the Ld. CIT(A) for de novo adjudication. We direct the assessee to file an appeal before the Ld. CIT(A) against the order under section 154 dated 09.04.2014 within one month from the date of receipt of this order. Since, in this case there was mistake on the part of the Assessing Officer, as he did not bring the addition made by him in the computation of taxes and did not create the demand, and that is why, assessee s issue has not been adjudicated. The assessee should not suffer because of the mistake made by the Assessing Officer. Hence, assessee deserves that delay in filing appeal against the order under section 154 should be condoned. Therefore, we direct the Ld. CIT(A) to condone the entire delay in filing the appeal against the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows: 1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in not adjudicating the ground of making addition of ₹ 12,10,00,000/- u/s 68 of the I.T. Act, on account of unexplained share application money. 2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of assessing officer in making ad hoc disallowance of ₹ 80,97,725/- being 10% of various expenses. 3. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in not granting setoff of unabsorbed depreciation loss and carried forward business loss of previous years from the assessed income of the assessee. 4. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in not granting setoff of current year business loss as returned from the assessed income of the assessee. 5. It is therefore prayed addition made by Assessing Officer and confirmed by learned Commissioner of Income-tax (Appeals) may please be deleted. 6. Appellant craves leave to add, alter or delete any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reproduced below: The assessee company filed its e-return of income on 14.04.2012 showing total loss at (-) ₹ 5,42,33,736/-. The assessment U/s 143(3) of the I.T. Act was completed on 31.03.2014. While finalizing the assessment U/s l43(3) of the Act, the following additions were made:- (i) Unexplained cash credit U/s 68 of the Act : ₹ 12,10,00,000/- (ii) Out of business Expenses : ₹ 80,97,725/- 2. On perusal of the case records and assessment folder, it is seen that the following errors have been crept in to the computation of income which is forming part of the assessment order while arriving at the assessed total income of the assessee company. It is seen that the addition of ₹ 12,10,00,000/- made U/s 68 of the I.T. was remained to be added back in the computation of income. On account of the above error in the computation of income, the total income of the company was assessed at ₹ 4,61,36,009/- instead of assessing the total income at ₹ 7,48,63,991/- which has resulted into underassessment of income by ₹ 2,87,27,982/-. 3. However, it is clear from the assessment records that the additions were made after elabora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition has been made in the computation of income and no demand has been raised in the assessment order passed u/s 143(3) of the Act dtd 31.03.2014 against which appeal has been filed which is under consideration. Any ground can be raised against the orders specified in Sec 249A of the Act which provides for two appeals against orders passed u/s 143 (3) 154 of the Act. Before filing appeal or raising ground of appeal it is a pre-condition that assessee should be aggrieved against the order. This is the sine qua non for raising any ground of appeal or filing of appeal. Since no tax liability has been fastened against assessee nor any demand has been raised in respect of Share application money of ₹ 12,10,00,000/-, there is no occasion for the assessee to be aggrieved . During the appellate proceedings, the AR of the assessee has filed copy of order passed u/s 154 of the Act dtd 09.04.2014 by which the AO has made addition of ₹ 12,10,00,000/- towards Share Application Money. As discussed earlier order passed u/s 154 of the Act is a separate order for which assessee need to file appeal separately. In view of these facts, I am of considered view that ground No. 1 rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses, Selling Expenses, Commission etc., aggregating to ₹ 8,09,77,259/-. During the course of assessment proceedings, the assessee was asked to furnish the details of the above expenses claimed along with supporting proof and evidences to prove that the said expenses are wholly and exclusively incurred for the purpose of business. In response, the assessee has furnished copy of the ledger account of above expenses. The assessing officer was of the view that assessee has failed to prove that said expenditure has been incurred wholly and exclusively for the purpose of the business. Therefore, an amount of ₹ 80,97,725/- being 10% of the above mentioned expenses of ₹ 8,09,77,259/- was disallowed and added to the total income of the assessee. 11. Aggrieved by the order of the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the addition made by the Assessing Officer. Aggrieved by the order of the ld. CIT(A), the assessee is in appeal before us. 12. We have heard both the parties and perused the material available on record. Learned Counsel for the assessee relied on the submission made before the authorities be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er than going for ad hoc disallowance of percentage basis of the expenses claimed by the assessee which action of the AO is arbitrary in nature and cannot be sustained. For that we rely on the judgment of the Hon`ble Delhi High Court in the case of National Industrial Corp. Ltd, 258 ITR 575 (Del-HC) wherein it was held as follows: 26. Regarding the sale promotion expenses, according to the assessee-company it spent ₹ 23,75,170 on giving major gift items. The AO held that keeping in view the nature of the business of the assessee-company and the reasonableness of such expenditure he deemed it fit to disallow 50 per cent of the expenditure on gift items as detailed in the table being of a non-business nature and thus disallowable as per provisions of s. 37(1) of the IT Act and initiated penalty proceedings under s. 271(1)(c) of the Act separately on this issue. 27. The CIT(A) mentioned about the disallowance of sale promotion expenses of ₹ 11,83,585 and allowed ₹ 10 lakhs, which according to her was related to business and a part of ₹ 1,83,585 was confirmed as used in personal gifts and personal expenditure. 28. The Tribunal has observed that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mention here that there was no material on record to show that any part of these expenditures were not for the purpose of business. Therefore, we delete the ad hoc addition of ₹ 80,97,725/-. 15. Ground No. 3 and 4 relates to set off of unabsorbed depreciation loss and carried forward business loss of previous years from the assessed income of the assessee. 16. We note that this issue is consequential in nature. If the assessee is entitled to claim set -off of unabsorbed depreciation loss and carried forward business loss of previous years, he should be allowed such benefit in accordance with law. The assessee submitted before us copy of return of income wherein he claimed carry forward business loss, vide paper book page No. 13, which is given below: Details of Losses to be carried forward to future years Sl. No Assessment Year Date of Filing (YYYY/MM/DD) House property loss Loss from business other than loss from speculative business Loss from speculative business Loss from specified business Short-term capital loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 201 1-12 (Current year losses) 0 5423373 0 0 0 0 xii. Total loss Carried Forward to future years 0 20741808 0 0 0 0 Sl. No Assessment Year 17. The assessee also submitted before us a chart showing the details of unabsorbed business losses, which is given below: Chart showing details of unabsorbed business losses to be set off/carried forward Assessment Year (Rs.) 2003-04 3,18,846 2004-05 1,77,526 2005-06 4,23,270 2006-07 5,76,024 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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