METRO CREATORS,VASHI vs. ACIT, CIRCLE 28(2), MUMBAI, VASHI

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ITA 2936/MUM/2026Status: DisposedITAT Mumbai25 May 2026AY 2018-195 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found it appropriate to set aside the matter to the Assessing Officer to examine the assessee's claims afresh. The assessee is allowed to furnish necessary evidence to substantiate its claims.

What were the facts?

The assessee, a builder, claimed set off of brought forward business loss and unabsorbed depreciation, and credit for TDS. The CPC and CIT(A) denied these claims, citing procedural issues and lack of proper documentation in the ITR.

What were the issues?

Whether brought forward business loss and unabsorbed depreciation can be set off against current year's income, and whether TDS credit can be allowed despite alleged deficiencies in ITR filing.

Which sections of the Income-tax Act were involved?

Section 72,Section 194IA,Section 154,Section 143(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SMT. BEENA PILLAI, JM & SHRI ARUN KHODPIA, AM

Hearing: 25.05.2026

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI, JM & SHRI ARUN KHODPIA, AM I.T.A. No.2936/Mum/2026 (Assessment Year: 2018-19) Metro Creators ACIT, Circle 28(2), Mumbai Room No. 419, 4th floor, Tower No.6, B 517/519, Arenja Corner, Sector Vs. 17, Vashi, Navi Mumbai-410210 Vashi Railway Station Commercial Complex, Vashi, Navi Mumbai-400703 PAN: AAPFM3350E Assessee- अपीलाथ� / Appellant Revenue-��थ�/ Respondent :

Assesseeby : Ms. Vidhi Solani Revenueby : Smt. B. Brahma Vidya – Sr. DR : 12.05.2026 Date of Hearing : 25.05.2026 Date of Pronouncement

O R D E R Per Arun Khodpia, AM: This appeal is preferred by the assessee, directed against the order of the Commissioner of Income Tax Appeals – ADDL/JCIT (A), Kochi [in short, “the Ld. CIT(A)”], dated 22.01.2026 for the assessment year 2018-19,arises against the assessment order under section 154 of the Income Tax Act, 1961 [in short, “the Act”] dated 17.02.2020, passed bythe CPC, Bengaluru [in short, “the Ld.AO”].The grounds of appeal raised by the assessee, are as under: “1. The Hon. CIT(A) erred in not granting set off of Rs.3,77,690/- being brought forward Business loss and Unabsorbed depreciation from AY 2016-17 and AY 2017-18, inspite of the fact that all the conditions for such set off as provided u/s 72 of the I. T.

ITA No. 2936/Mum/2026 Metro Creators Act, 1961 were duly fulfilled and therefore denial of such set off is not justified and the consequent addition of Rs.3,77,690/- is required to be deleted. 2. The Hon. CIT(A) erred in refusing to grant credit for TDS amounting to Rs.56,200/- deducted by customers u/s 194IA of the I. T. Act, 1961, inspite of such TDS credit being claimed in the ITR for A.Y. 2018-19 and duly reflected by form 26AS. The appellant prays for grant of TDS credit of Rs. 56,200/- in determining the tax lability for the year under appeal. 3. The appellant craves leave to add, alter, amend and/or vary the above grounds of appeal at any time before the decision of the appeal.”

2.

Briefly stated, the assessee is a builder and developer having income from business of sale of flats. Assessee has filed its return of income on 18.06.2018 declaring total income at Rs.21,31,982/-. In the said return, assessee has claimed setting off of brought forward losses amounting to Rs.3,76,801/- and brought forward unabsorbed depreciation amounting to Rs.889/-. While processing the return of income of assessee u/s 143(1), the CPC had not allowed the aforesaid brough forward losses and brought forward unabsorbed depreciation, therefore, the income of assessee has been enhanced to Rs.2,50,96,721/-. The assessee filed a rectification application u/s 154 regarding the aforesaid set off of losses and depreciation. However, the application of assessee has been disposed of vide order u/s 154 dated 17.02.2020, with no rectification giving the reason that “As seen from the e-file return of income and rectification filed by assessee, it is found that there is a difference in net tax liability.” However, the assessee’s contention for rectification is not given effect to and the Brought forward of losses / Depreciation were not allowed.

ITA No. 2936/Mum/2026 Metro Creators 3. Against order u/s 154, the assessee preferred an appeal before the Ld. CIT(A), who had dismissed the appeal of assessee observing as under: “5.7 It is seen from the above, that the Rectification Order passed by CPCu/s. 154 dated 17.02.2020, against which the appellant has filed the present appeal has been subsequently merged in the Rectification Order passed u/s 154 rws 143(1) dated 07/08/2023 passed by the ACIT, Circle 27(2), Mumbai which is reproduced in the para no.5.6 above. On merit of the case also, while verifying the return of income filed for the year 2018-19, it is found that the assessee has not claimed any losses against the income offered u/s. 44AD. In view of the above discussions made in Paragraph Nos. 1 to 5.8, the ground of appeal requesting to allow brought forward loss and depreciation against the current year income under the head income from business or profession is dismissed. 5.8 Second ground of appeal is in respect of not allowing credit of TDS on immovable property of Rs. 56,200/-. However, on verification of the ITR 4 filed the appellant, it is observed that the appellant has not filled up the relevant columns in Schedule TDS in ITR 4 even though the onus lies on the assessee to furnish all the details in the relevant columns in the respective Schedules in the ITR in order to claim any deduction or current year loss or carry forward of loss etc. 5.9 In view of all the above, as the Rectification Order u/s. 154 passed by CPC dated 17.02.2020, against which the present appeal has been filed, has merged in the subsequent Rectification Order passed u/s 154 rws 143(1), passed by ACIT, Circle 27(2), Mumbai dated 07/08/2023, and also as the relevant details have not been 1) filled up in the respective columns in the relevant schedules in the ITR, the present appeal filed against the Rectification Order u/s. 154 dated 17.02.2020 is treated as infructuous and accordingly, the present appeal is dismissed.”

4.

Being aggrieved with the aforesaid decision by Ld. CIT(A), assessee preferred an appeal before us. Further, another rectification has been processed u/s 154 vide order dated 07.08.2023 by ACIT Circle 27(2), Mumbai, who had rejected the application of assessee stating that the assessee has not claimed any losses against the income offered u/s 44AD. Therefore, there is no mistake apparent from record and the intimation u/s 143(1) is correct.

ITA No. 2936/Mum/2026 Metro Creators 5. Before us, it is submitted by the Ld. AR that the losses brought forward by the assessee, pertains to assessment years 2016-17 and 2017-18 and the assessee had filed its return within the prescribed time limit u/s 139(1) of the Act. Further, regarding the issue of TDS which was deducted u/s 194-IA for Rs.56,200/-, the claim of assessee was not accepted by the Ld. CIT(A) in terms of his observations (extracted supra), that the assessee has not filled up the relevant columns in scheduled TDS in ITR 4 even though the onus lies on the assessee to furnish all such details. It was the prayer that the assessee may be granted the legitimate set off of brought forward loss and depreciation and the credit of TDS. In the interest of justice.

6.

Per contra, Ld. DR representing the Revenue vehemently supported the orders of Revenue Authorities.

7.

We have considered the rival submissions and perused the material on available record.

8.

It was the submission by Ld. AR that whether or not the assessee has claimed the brought forward the losses in return of income, the Income-tax Authorities are required to give effect to section 72(1)(i) and set off such losses.

9.

On a thoughtful consideration of the aforesaid facts and circumstances, in the interest of justice, we find it appropriate to set aside the matter back to the file of Ld. AO to examine the claim of assessee and allow the same in accordance 4

ITA No. 2936/Mum/2026 Metro Creators with the law after hearing the assessee on the issue. The assessee would be at liberty to furnish necessary evidence to substantiate its claim. The Ld. AO needs to adjudicate the issue afresh on merits.

10.

In result, the appeal of assessee is allowed for statistical purposes. Order pronounced in the open court on 25-05-2026.

Sd/- Sd/- (BEENA PILLAI) (ARUN KHODPIA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated : 25-05-2026. Ankit K., Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai

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