The ACIT, Bhopal v. M/s. Himanshu Floor Mills Pvt.Ltd.,, Bhopal

ITA 506/IND/2009 | 2003-2004
Pronouncement Date: 28-05-2010 | Result: Dismissed

Appeal Details

RSA Number 50622714 RSA 2009
Bench Indore
Appeal Number ITA 506/IND/2009
Duration Of Justice 6 month(s) 25 day(s)
Appellant The ACIT, Bhopal
Respondent M/s. Himanshu Floor Mills Pvt.Ltd.,, Bhopal
Appeal Type Income Tax Appeal
Pronouncement Date 28-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 28-05-2010
Assessment Year 2003-2004
Appeal Filed On 03-11-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER ITA NO.506/IND/09 A.YS. 2003-04 ASSTT. COMMISSIONER OF INCOME TAX 1(1) BHOPAL APPELLANT VS M/S HIMANSHU FLOOR MILLS PVT. LTD. BHOPAL PAN AAACH-8402Q RESPONDENT APPELLANT BY : SMT. APARNA KARAN SR. DR RESPONDENT BY : SHRI H.P. VERMA ALONG WITH SHRI ASHISH GOYAL O R D E R PER JOGINDER SINGH JM THIS APPEAL IS BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A) DATED 26.8.2009. THE FIRST GROUND RAISED IS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMI SSIONER OF INCOME- TAX (APPEALS) ERRED IN DELETING THE ADDITION OF RS. 5 46 831/- MADE ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON FIXED AS SETS. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS THAT THE ASSE SSEE HAS NOT 2 MAINTAINED PROPER RECORD OF FIXED ASSETS AND THE FU LL PARTICULARS INCLUDING QUANTITATIVE DETAILS AND SITUATION OF FIXED ASSETS HAS NOT BEEN EXPLAINED BY THE ASSESSEE. IT WAS ALSO CONTENDED WHETHER THE FIXED ASSET WAS PUT TO USE DURING THE RELEVANT PREVIOUS YEAR IS ALSO NO T KNOWN THEREFORE THE DEPRECIATION WAS RIGHTLY DENIED. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE STRONGLY DEFENDED THE IMPUGNED ORDER B Y CONTENDING THAT DEPRECIATION WAS DISALLOWED MERELY ON THE BASIS OF NOTES TO THE ACCOUNTS BY THE AUDITOR. IT WAS ALSO POINTED OUT TH AT THE DEPRECIATION ON ALL THESE ASSETS IS REGULARLY ALLOWED SINCE THE DAT E OF INCLUSION IN THE BALANCE-SHEET AND MERELY ON THE BASIS OF REMARK OF THE AUDITOR IT CANNOT BE DISALLOWED. 2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. WE HAVE FOUND THAT WDV AS ON 31.3.2002 WAS TAKEN AFTER REDUCING THE SALE OF SOME ASSETS. IT IS ALSO FOUND THAT THE ASSESSEE WAS ALLOWED DEPRECIATION FOR THE ASSESSMENT YEAR 2002- 03 WHEREIN THE AMOUNT OF RS.68 21 554/- WAS WORKED OUT AFTER CLAIM ING DEPRECIATION AS ON 31.3.2002. THE ASSESSEE HAS TAKEN THE SAME VALU E DURING THE YEAR. THE ASSESSEE ALSO CARRIED ON THE BUSINESS THEREFOR E THE ASSET WAS UTILISED FOR BUSINESS PURPOSES. THERE IS NO DISPUT E TO THE FACT THAT THE FIXED ASSET WAS OWNED BY THE ASSESSEE AND AT THE S AME TIME IT WAS PUT TO USE FOR BUSINESS PURPOSES CONSEQUENTLY NO ADHO C DISALLOWANCE CAN 3 BE MADE FOR THE CLAIM OF DEPRECIATION. THEREFORE WE FIND NO INFIRMITY IN THE STAND OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 3. THE NEXT GROUND RAISED PERTAINS TO ALLOWING THE CARRY FORWARD OF BROUGHT FORWARD LOSSES OF EARLIER YEARS. THE ARG UMENT ADVANCED BY THE SENIOR DEPARTMENTAL REPRESENTATIVE WAS THAT THE DISALLOWANCE WAS RIGHTLY MADE IN THE ABSENCE OF ANY PROOF FURNISHED BY THE ASSESSEE. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE DE FENDED THE IMPUGNED ORDER. 4. ON PERUSAL OF RECORD AND AFTER HEARING RIVAL SU BMISSIONS WE HAVE FOUND THAT THE CARRYING FORWARD OF LOSSES OF E ARLIER YEARS TO THE SUBSEQUENT YEARS WAS NOT ALLOWED ON THE PLEA THAT N O PROOF OF LOSSES OF PAST YEAR WAS FURNISHED BY THE ASSESSEE. THE STAND OF THE ASSESSEE IS THAT RETURNS OF THE PREVIOUS YEARS FILED BY THE ASS ESSEE AND THE LOSSES WHICH WERE ALREADY ASSESSED WERE WITH THE ASSESSING OFFICER THEREFORE THE ASSESSING OFFICER WAS NOT JUSTIFIED IN NOT ALLO WING THE CARRY FORWARD OF ASSESSED LOSSES OF EARLIER YEARS. IN THE IMPUGNE D ORDER THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) DIRECTED THE A SSESSING OFFICER TO ALLOW CARRY FORWARD OF BROUGHT FORWARD LOSSES OF EA RLIER YEARS WHICH WERE NOT SET OFF THAT TOO AFTER VERIFICATION OF RECORD O F EARLIER YEARS. SECTION 72 PROVIDES FOR CARRY FORWARD OF LOSSES WHEN SUCH LOSS ES ARE NOT SET OFF AGAINST THE INCOME UNDER ANY OTHER HEAD. THE UNABSO RBED LOSSES MUST ENTER THE ASSESSMENT OF EVERY FOLLOWING YEAR FOR AS CERTAINING WHETHER 4 THEY COULD BE SET OFF AGAINST THE PROFITS AND GAINS OF ANY BUSINESS PROFESSION OR VOCATION. IT IS ONLY WHEN IT IS FOUN D IN EACH YEAR THAT THEY COULD NOT BE ABSORBED THEN THEY ARE ALLOWED TO BE CARRIED FORWARD. LOSS CAN BE SET OFF AGAINST INCOME FROM ANY BUSINESS. EV EN OTHERWISE THE ITO IS SUPPOSED TO ALLOW SET OFF EVEN IF IT IS NOT CLAIMED AND OTHERWISE ALLOWABLE CONSEQUENTLY THERE IS NO INFIRMITY IN T HE DIRECTION OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). FINALLY THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 28 TH MAY 2010. SD/- SD/- (V.K. GUPTA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MAY 28 2010 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE *DN/