M/S. I G PETROCHEMICALS LIMITED,BENGALURU vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE- 3(1)(1), BENGALORE

PDF · subscribers
ITA 2223/BANG/2019Status: DisposedITAT Bangalore12 January 2021AY 2016-173 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal agreed that the issues could be better appreciated if both the appeal against the assessment order and the appeal against the rectification order were disposed of together. Therefore, the Tribunal set aside the CIT(A)'s order and restored the issues to the CIT(A)'s file for fresh examination.

What were the facts?

The Assessing Officer (AO) made an addition under Section 68 of the Income Tax Act, 1961, and then passed a rectification order to set off brought forward losses. The assessee challenged the rectification order, but the CIT(A) dismissed the appeal stating no additional tax liability. The assessee argued that the AO's methodology could affect future loss carry-forwards.

What were the issues?

The primary issue was the head under which an addition made under Section 68 should be included, and its potential impact on brought forward losses. The secondary issue was whether the CIT(A) correctly dismissed the appeal against the rectification order without considering the potential impact on future loss carry-forwards.

Which sections of the Income-tax Act were involved?

Section 68,Section 154,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B’’BENCH: BANGALORE

Before: SHRI B. R. BASKARAN & SMT. BEENA PILLAI

For Appellant: Smt. R. Prathibha, A.R
For Respondent: Shri Muzaffar Hussain, D.R
Hearing: 12.01.2021Pronounced: 12.01.2021

PER B.R. BASKARAN, ACCOUNTANT MEMBER:

1.

The assessee has filed this appeal challenging the order dated 20.8.2019 passed by Ld. CIT(A)-3, Bengaluru and it relates to the assessment year 2016-17. The only issue urged in this issue relates to head under which addition made u/s 68 of the Income-tax Act,1961 ['the Act' for short] is to be included.

2.

The Ld. A.R. submitted that the assessment in the hands of the assessee for the year under consideration was completed u/s 143(3) of the Act on 29.12.2018. Subsequently, the A.O. passed rectification order u/s 154 of the Act on 15.2.2019 in order to give

M/s. I.G. Petrochemicals Ltd., Bangalore

Page 2 of 3 set off of brought forward losses. However, while computing the total income, the A.O. has added u/s 68 of the Act amounting to Rs.6,52,50,000/- separately to the total income, without including the same under any of the heads, i.e., the AO gave set off of the brought forward losses, computed taxable income and then added the addition u/s 68 of the Act. Accordingly the Total income was computed.

3.

The assessee challenged the order passed u/s 154 of the Act by filing appeal before Ld. CIT(A), who dismissed the appeal of the assessee by observing that there is no tax effect on the methodology adopted by the A.O. since no additional tax liability gets imposed on the appellant.

4.

The Ld. A.R. submitted that the treatment given by the A.O. may affect the quantum of losses to be carried forward by the assessee. She further submitted that the assessee has also filed appeal before Ld. CIT(A) challenging the assessment order passed u/s 143(3) of the Act and hence, the question as to whether there is any additional tax liability or not on account of different treatment given by the A.O. would be determinable only after the order passed by Ld. CIT(A). Under these set of facts, the Ld. A.R. prayed that this appeal may also be restored to the file of Ld. CIT(A) so that he could dispose of both the appeals of the assessee, viz., appeal filed against order passed u/s 143(3) of the Act and the appeal filed against the order passed u/s 154 of the Act together.

5.

We heard Ld. D.R. who did not object to the prayer put forth by the assessee.

M/s. I.G. Petrochemicals Ltd., Bangalore

Page 3 of 3 6. Having regard to the submissions made by Ld. A.R., we are also of the view that the issues contested in this appeal may be restored to the file of Ld. CIT(A), since it will be easy to appreciate the contentions of the assessee, if both the appeals of the assessee are disposed together. Accordingly, we set aside the impugned order passed by Ld. CIT(A) and restore all the issues to his file for examining them afresh, after affording adequate opportunity of being heard to the assessee.

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →