GHCL LIMITED,AHMEDABAD vs. THE DY.CIT, CENTRAL CIRCLE-1(2), AHMEDABAD

The relevant facts for the adjudication of the issues raised in the grounds of appeal are that the assessee filed the return of income on 27.11.2015 declaring total income of Rs.184,75,65,720/-. The return of income was processed u/s. 143(1) on 04-11-2016, wherein the income under normal provisions was computed at Rs. 184,75,65,720/- and the book profit u/s. 115JB was computed at Rs.258,01,15,981/-. In pursuance to CIT(A)-2 Orders for AY 2011-12, AY 2012- 13 and AY 2014-15, the unabsorbed depreciation and brought forward business loss, allowable to the assessee company was worked out at Rs. 150,21,12,383/-.

The assessee company filed an application u/s. 154 on 24-07-2017 requesting the Assessing Officer to rectify Order u/s. 143(1) dated 04-11-2016 and allow the set-off of unabsorbed depreciation and brought forward business loss of Rs.150,21,12,383/-. The Assessing Officer passed order u/s. 154 on 30-08-2017, accepting the contentions of the assessee company and computed revised total income at Rs.38.39,59,400/-.

The history of the case was that the assessee's claim of brought forward business loss was on account of invocation of corporate guarantees of subsidiary companies, which were given for the purpose of Global business of the assessee company and was commercially expedient, during AY 2011-12 to AY 2014-15. After the AO had disallowed the claim, assessee got relief both at the level of CIT(A) / ITAT and the claim has been consistently allowed in all these years. A copy of Order Giving Effect to CIT(A)'s Order u/s. 250 dated 21-07-2017 for AY 2014-15 is placed on record. The relief given by CIT(A) has been approved by the ITAT Ahmedabad as per consolidated order for AY 2009-10 to AY 2014-15 dated 05-03-2021. Thus, the matter stands settled upto the level of Tribunal.

Later, owing to search on Neelkanth Group on 10-11-2021, a notice u/s. 153C was issued to the assessee company on 29-06-2022. The assessee company filed return u/s. 153C on 19-07-2022. However, inadvertently, the returned income was shown at Rs. 184,75,65,720/- i.e. income as per return u/s. 139(1) as against the correct figure of Rs.38,39,59,400/-, vide order u/s. 154 dated 30-08-2017. No additions were made and the Assessing Officer has accepted the returned income vide Order u/s. 143(3) rws 153C for AY 2015-16 dated 25-01-2024. GHCL Limited Vs. DCIT Asst. Year : 2015-16 - 4–

Later, rectification applications had been filed on 25-03-2024 and 18-11- 2024 requesting the AO to rectify Order u/s. 153C dated 25-01-2024 and allow unabsorbed depreciation and determined brought forward business loss Rs. 150,21,12,383/-. The request of the assessee company has been rejected, as per Order dated 25-11-2024. The rejection of the rectification application by the Assessing Officer is on the ground that assessee had not made the claim of brought forward business loss and unabsorbed depreciation in the return filed u/s. 153C and no new claim could be made before the Assessing Officer except by filing revised return of income following the decision of Supreme Court in the case of Goetz India Ltd 284 ITR 323 (SC) and further if no claim in the return u/s. 153C was made, there was no mistake in AO not allowing the set-off of brought forward business loss and unabsorbed depreciation.

Heard the arguments of both the parties and perused the material available on record.

Since the revised total income as per the order U/s 154 dated 30.08.2017 stands at Rs.38,39,59,400/- and since no additions have been made in the Assessment Order passed u/s 153C of the Act, the mistake apparent in the return filed during the proceedings u/s 153C needs to be rectified and returned income shall be treated similar to that of the order u/s 154 dated 30.08.2017. 10. In the result, the appeal of the assessee is allowed.