INDIA FURNITURE PRODUCTS LIMITED, REPRESENTED BY ITS DIRECTOR SHRI. PERVESH KUMAR GANDHI. vs. THE COMMISSIONER OF INCOME TAX, PANAJI.

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TXA/50/2015HC BombayHCBM05001712201506 June 2016Author: F. M. REIS,HON'BLE KUM. JUSTICE NUTAN D. SARDESSAI4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court noted that the impugned order of the ITAT did not specifically mention the method of calculation in terms of the explanation to Section 115JB(2) of the Income Tax Act. Without delving into the merits of the rival arguments, the Court found it appropriate to quash and set aside the ITAT's order. The matter was remanded to the ITAT for re-examination solely on the limited aspect of whether the assessee was entitled to a deduction for losses incurred as provided in Section 115JB(2). The Tribunal was also directed to consider any further material the assessee wished to produce, after hearing both parties. The Court clarified that the appeal was remanded only for this restricted purpose.

What were the facts?

The assessee, India Furniture Products Limited, is appealing an order dated 09/02/2015 passed by the Income Tax Appellate Tribunal (ITAT), Panaji, Goa. The appeal concerns the assessment year(s) not explicitly stated in the judgment. The dispute revolves around the deduction of losses claimed by the assessee. The assessee contended that it was entitled to a deduction of total loss amounting to Rs. 1,59,28,201/-, but the revenue authorities allowed only Rs. 71,12,238/-. The High Court admitted the appeal on a substantial question of law regarding the ITAT's calculations under Section 115JB(2) of the Income Tax Act.

What were the issues?

1. Whether the impugned order dated 09/02/2015 passed by the Income Tax Appellate Tribunal, Panaji, Goa stands vitiated for not carrying out the calculations in terms of Section 115JB(2) of the Income Tax Act? Assessee's contentions: The assessee argued that it had provided material to establish its entitlement to a deduction of total loss to the extent of Rs. 1,59,28,201/-, but the revenue authorities only allowed a deduction of Rs. 71,12,238/-. The assessee claimed this accumulated loss was deductible when computing income. Revenue's contentions: The revenue submitted that the assessee had not furnished any material to prove that the claimed amount was a loss deductible under Section 115JB(2). The revenue also stated that accumulated depreciation cannot be included when computing such loss. Furthermore, the revenue suggested that if any material was not considered, the ITAT could re-examine the matter on that specific aspect.

Which sections of the Income-tax Act were involved?

Section 115JB(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Panaji, Goa

(I)

The appeal is partly allowed. (II) The impugned order dated 09/02/2015 passed by the Income Tax Appellate Tribunal, Panaji, Goa is partly quashed and set aside to the extent referred to herein above. (III) ITA No.292/PNJ/2014 is restored to the file of the learned Tribunal. (IV) The learned Tribunal shall re-examine the matter only in the light of the observations made herein above, after hearing the parties in accordance with law. (V) The appeal stands disposed of accordingly.

NUTAN D. SARDESSAI, J. F.M. REIS, J. ssm.

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