TMI Blog2020 (1) TMI 1614X X X X Extracts X X X X X X X X Extracts X X X X ..... Credit Guarantee Corporation Ltd. (DICGCI) being subsidiary of Reserve Bank of India for the purposes of reimbursement of insurance claim of deposit with bank under liquidation within the limit of Rs. 1 Lakh or less and accordingly DICGCI has paid bank under liquidation which was utilized for the purpose of repayment of depositors to the extent of Rs.1 Lakh. According to DICGCI Act, bank was authorized to realize its assets and advances coercively and whatever proceeds are realized, bank could utilize such proceeds for repayment of liabilities of depositors and other liabilities. In view of the aforesaid mandate available by virtue of DICGCI Act, a deficit arose in the hands of the assessee in the process of recovery and repayment. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -3, Ahmedabad (CIT(A) in short), dated 18.12.2017 arising in the assessment order dated 16.03.2016 passed by the Assessing Officer (AO) under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2013-14. 2. The ground of appeal filed by the Revenue reads as under: 1. The Ld. CIT(A) has erred in law and on facts in deleting the disallowance of carry forward of losses on account of unrealized amount of advances amounting to Rs.(-)18,14,14,727/-, ignoring the provisions of section 139(3) of the IT Act, 1961. 3. None appeared for the assessee. The appeal of the Revenue is accordingly heard ex parte in the absence of the assessee. 4. When the matter was called for hearing, the learned DR for the Revenue relied upon the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have any taxable income till the liability of DICGCI is fully paid off due to diversion of income at source. 7. The CIT(A) has examined the issue threadbare and has recorded a finding in favour of the assessee for non-applicability of Section 139(3) of the Act in the circumstances which reads as under: 4. DECISIONS: I have considered the facts of the case and the argument of the appellant carefully. All three grounds are taken together for adjudication. The factual matrix as per para-3 above have been kept in mind while deciding the issue. It is undisputed fact that Bank is under liquidation with effect from 28/03/2003 and administration of bank is in hands of official of cooperative department of Govt. of Gujarat for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of business losses u/s. 72(1) of the IT. act,1961 and such legal situation has been upheld in the case of PEERLESS GENERAL FINANCE AND INVESTMENT CO. LTD. V/S. CIT (2015 378 ITR 718 (CAL) as well as CIT V/S. BRITISH INSULATED CALENDER'S LIMITED 202 ITR 354 (BOMBAY) AND ACIT V/S. SANJAY BASRATHI GEMS LTD 84 TAXMANN.COM 138 (JAIPUR). Under the circumstances, we agree with the submission of assessee for setoff of loss against current year income and assessee shall not have right of carry forward of business loss u/s. 72(1) of the I.T. act, 1961. While considering alternative plea of diversion of income at source, I have gone through judgement of Supreme Court as well as judgement of Gujarat High Court in the case of Visnagar Nagarik Sah ..... X X X X Extracts X X X X X X X X Extracts X X X X
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