MASTERS REALTY PVT.LTD,PUNE vs. INCOME-TAX OFFICER, WARD - 14(4), PUNE

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ITA 408/PUN/2018Status: DisposedITAT Pune10 January 2019AY 2014-154 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee had no business activity, and therefore, no business loss could be claimed. Consequently, the set off of business loss against income from other sources was not permissible.

What were the facts?

The assessee appealed against the CIT(A)'s order for AY 2014-15. The assessee did not appear for hearings despite multiple notices. The assessee's primary ground was the denial of set off of business losses against income from other sources.

What were the issues?

Whether business losses can be set off against income from other sources when there is no business activity. Whether the conditions for claiming business loss under Section 72 are met.

Which sections of the Income-tax Act were involved?

Section 72

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, PUNE

Before: SHRI VIKAS AWASTHY, JM

For Respondent: Shri Rajesh Gawali

आदेश / ORDER

PER VIKAS AWASTHY, JM :

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-7, Pune dated 14-11-2017 for the assessment year 2014-15.

2.

The first notice of appeal was sent to the assessee through RPAD on 29-10-2018 for 29-11-2018. The notice of appeal was duly served as is

2 ITA No. 408/PUN/2018, A.Y. 2014-15

evident from the acknowledgment available on record. However, none appeared on behalf of the assessee on the date fixed i.e. 29-11-2018. Fresh notice of hearing of the appeal was issued for 10-01-2019. The second notice of appeal was sent to the assessee through RPAD on 30-11- 2018 for today i.e. 10-01-2019. The notice was duly served on the assessee as is evident from the acknowledgment available on file. Despite service of second notice neither the assessee nor any authorized representative of assessee appeared to represent the case. Nor there is any request for adjournment from the assessee. It appears that the assessee is not keen to pursue the appeal. Under such circumstances we proceed to decide the appeal of the assessee with the assistance of ld. DR and the material available on record.

3.

The assessee in appeal has assailed the order of Commissioner of Income Tax (Appeals) by raising following grounds : “1. On the facts and in the circumstances of the case and in law the Lower Authorities have erred in not allowing the set off of carried forward business loss and current business loss against the income from other sources of Rs.3,87,540/-. It is your appellant claim that he is entitled for the same as per the provisions of section 72 of the Income Tax Act, 1961.”

4.

Shri Rajesh Gawali representing the Department vehemently supported the order of Commissioner of Income Tax (Appeals). The ld. DR to further strengthen his submissions relied on following decisions : i. Devi Electronics (P.) Ltd. Vs. Income Tax Officer, 77 taxmann.com 259 (Bombay); ii. Assistant Commissioner of Income Tax Vs. Lavish Apartment (P.) Ltd., 92 ITD 58 (Delhi).

3 ITA No. 408/PUN/2018, A.Y. 2014-15

5.

I have heard the submissions made by the ld. DR and have perused the orders of authorities below. The assessee company is not carrying any business. The assessee has earned income from renting of the property and the same is offered to tax by the assessee under the head „Income from house property‟. Apart from above assessee has interest income of Rs.3,87,540/-. Expenses in respect of house property have already been allowed as standard deduction u/s. 24(a) of the Act. The assessee has claimed expenditure in respect of remuneration to Director. The Commissioner of Income Tax (Appeals) rejected the claim of assessee on the ground that since there is no business of the assessee, there is no question of business loss. The provisions of section 72 allow set off of business loss/carried forward business loss against income under any head (except under the head „Salaries‟). But to claim loss, the assessee has to show business activity was carried during previous year or in the past which resulted in generation of loss. There is no material available on record controverting the findings of Commissioner of Income Tax (Appeals). Therefore, I find no reason to interfere with the impugned order. Accordingly, the impugned order is upheld and the appeal of assessee is dismissed.

6.

In the result, the appeal of assessee is dismissed.

Order pronounced on Thursday, the 10th day of January, 2019.

Sd/- (ववकास अवस्थी / Vikas Awasthy) न्याययक सदस्य / JUDICIAL MEMBER

ऩुणे / Pune; ददनाांक / Dated : 10th January, 2019 RK

4 ITA No. 408/PUN/2018, A.Y. 2014-15

आदेश की प्रयिलऱवऩ अग्रेवर्ि / Copy of the Order forwarded to : अऩीऱाथी / The Appellant. 1. प्रत्यथी / The Respondent. 2. आयकर आयुक्त (अऩीऱ) / The CIT(A)-7, Pune 3. 4. The Pr. Commissioner of Income Tax-6, Pune ववभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, “एक-सदस्य मामऱा” बेंच, 5. ऩुणे / DR, ITAT, “SMC” Bench, Pune. गार्ड फ़ाइऱ / Guard File. 6. //सत्यावऩत प्रयत // True Copy// आदेशानुसार / BY ORDER,

यनजी सधचव / Private Secretary, आयकर अऩीऱीय अधधकरण, ऩुणे / ITAT, Pune

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