M/S. ANIL DYECHEM INDUSTRIES PVT.LTD.,AHMEDABAD vs. DY. COMMISSIONER OF INCOME TAX,CIRCLE-1(1)(1), AHMEDABAD

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ITA 114/AHD/2020Status: DisposedITAT Ahmedabad15 June 2022AY 2011-124 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that since the income from the sale of property in AY 2006-07 was determined as capital gain, the resultant loss should be allowed to be carried forward. The AO was directed to allow the carry forward of the capital loss for AY 2006-07 and 2007-08.

What were the facts?

The assessee claimed a brought forward capital loss from AY 2006-07 and 2007-08. The Assessing Officer disallowed this claim, stating the loss had already been set off in earlier years. The CIT(A) upheld the AO's decision.

What were the issues?

Whether the re-opening of assessment was valid and whether the brought forward capital loss was eligible for set off.

Which sections of the Income-tax Act were involved?

Section 147,Section 234A,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH, AHMEDABAD

Before: SHRI P.M. JAGTAP & Ms. SUCHITRA KAMBLE

For Appellant: Shri Manthan Khokhani, AR
For Respondent: Shri Mukesh Kumar Sharma, Sr.DR
Hearing: 30.05.2022Pronounced: 15.06.2022

PER SUCHITRA KAMBLE, JUDICIAL MEMBER :

1.

This is an appeal filed by the assessee against the order dated 20.11.2019 passed by the CIT(A)-1, Ahmedabad pertaining to Assessment Year 2011-12.

2.

The grounds of appeal are as under:

“(1). That on facts and in law the learned CIT(A) has grievously erred in holding that the re-opening of assessment u/s 147 of the Act is valid. (2). That on facts and in law the learned CIT(A) has grievously erred in confirming the action of the AO in disallowing the claim of carry forward of brought forward capital loss pertaining to AY 2006-07 and AY 2007-08 of Rs.3,87,646/- and Rs.9,12,468/- respectively. (3). That on facts and in law, it ought to have been held that the claim of loss brought forward and carry forward is rightly claimed by the appellant. (4). That the learned CIT(A) has grievously erred in confirming the charging of interest u/s.234A and 234B of the Act.

Assessment Year: 2011-12 Page 2 of 4

3.

The assessee filed return of income for A.Y. 2011-12 on 28.09.2011 declaring total income of Rs.84,02,968/-. The assessee had claimed brought forward capital loss pertaining to A.Y. 2006-07 and 2007-08 amounting to Rs.3,87,646/- and Rs.9,12,468/- which has to be carried forward for subsequent years. The Assessing Officer observed that the said capital loss has already been set off against the capital gain arisen in earlier year and, therefore, no capital loss remained to be carried forward for subsequent years. The Assessing Officer assessed the total income at Rs.1,02,70,130/-.

4.

Being aggrieved by the assessment order, the assessee field appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

5.

The Ld. AR submitted that the Assessing Officer has not allowed carried forward loss in A.Y. 2008-09 but that of 2007-08. As regards A.Y. 2006-07 the Tribunal observed that the income generated by the assessee from the sale of the property in dispute is taxable under the head “capital gain”. Accordingly, the Tribunal directed the Assessing Officer to treat the transaction for sale of land under the head “capital gain” and allowed the same (ITA No.377/Ahd/2011, order dated 08.06.2020). Ld. AR further submitted that since the same has been held as capital loss, the same should be allowed to be set off carried forward in the subsequent year. The Ld. AR has given a Chart explaining the factual matrix which is as follows:-

A.Y. 2006-07 As per appellant LTCL - 25 91 351 As per AO PGBP 27 83 879 ITAT Alloweod claim of appellant to claim C/f. of LTCL Deleted addition of Rs.27,83,879 made by Ld. AO A.Y. 2007-08 As per appellant LTCL - 9 12 468 As per AO LTCL - 9 12 468

Assessment Year: 2011-12 Page 3 of 4 A.Y. 2008-09 As per appellant As per AO LTCG 33 84 062 LTCG 33 84 062 Set off of LTCL Set off of LTCL A.Y. 2000-01 - 9 94 345 A.Y. 2007-08 - 9 12 468 A.Y. 2005-06 - 1 86 012 A.Y. 2006-07 - 22 03 705 - 2,471,594.00 Loss C/f. Loss C/f. A.Y. 2006-07 - 3 87 646 A.Y. 2006-07 - A.Y. 2007-08 - 9 12 468 A.Y. 2007-08 - A.Y. 2011-12 As per Loss C/f. As per AO Loss C/f. appellant

A.Y. 2006-07 - 3 87 646 A.Y. 2006-07 - A.Y. 2007-08 - 9 12 468 A.Y. 2007-08 -

6.

The Ld. DR relied upon the assessment order and the order of the CITA

7.

We have heard both the parties and perused all the relevant material available on record. Since in AY 2006-07, the Tribunal has held that the same is “capital gain” thus the loss can be carried forward in the subsequent year from the year 2006-07 onwards. The Assessing Officer has only set off of LTCG in respect of AY 2007-08 into 2008-09 but has not given the set off of LTCG in respect of 2006-07, 2007-08 and AY 2011-12. We direct the Assessing Officer that the same should be allowed thereby carry forward of brought forward capital loss pertaining to AY 2006-07 and 2007-08 of Rs.3,87,646/- and Rs.9,12,468/- respectively. The appeal of the assessee is partly allowed.

Assessment Year: 2011-12 Page 4 of 4 8. In the result, appeal of the assessee is partly allowed.

Order pronounced in the open Court on this 15th day of June, 2022.

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