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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL
Before: SHRI BEFORE SHRI G.D. AGRAWALG.D. AGRAWALG.D. AGRAWAL & G.D. AGRAWAL & AND & MS. SUCHITRA KAMBLE
PER G.D. AGRAWAL, VP :- PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP The appeal by the Revenue and the cross-objection by the assessee are directed against the order of learned CIT(A)-XXIX, New Delhi dated 28th December, 2011.
2 ITA-1341/Del/2012 & C.O.-107/Del/2014
The Revenue has raised the following ground in its appeal :-
“On the facts and in the circumstances of the case, the ld.CIT(A) has erred in deleting the addition of Rs.96,77,295/- made by the AO on account of adhoc disallowance of 5% out of material consumed, after having held that the books of accounts of the assessee were rightly rejected and the assessee without any sufficient cause failed to furnish the necessary details to the AO.”
In the cross-objection, the assessee has raised the following grounds :-
“1. That on the facts and in the circumstances of the case, the ld.CIT(Appeal) erred in law in sustaining rejection of accounts maintained by the assessee.
2. That on the facts and in circumstances of the case CIT(A) erred in not admitting additional evidence furnished before him by the respondent. (Para 4 of CIT(A) order)
3. That on the facts and circumstances of the case CIT(A) erred in upholding the addition of Rs.38,43,547/- as the 20% of Rs.1,92,17,732/- (Ground no.2.2 before CIT(A) para 4).
4. That on the facts and circumstances of the case CIT(A) erred in upholding the addition of Rs.54,09,879/- being 5% of labour charges of Rs.10,8197,584/- (Para 6 of CIT(A) order).”
At the time of hearing, we have noticed that as against the declared loss of `12.44 crores, the assessed loss determined by the Assessing Officer was `10.55 crores. The Assessing Officer made certain additions/disallowances. The assessee’s appeal was partly allowed by the CIT(A). Hence, the Revenue, aggrieved by relief
3 ITA-1341/Del/2012 & C.O.-107/Del/2014 allowed is in appeal while the assessee, aggrieved with the addition sustained, is in cross-objection.
At the time of hearing before us, we asked a question that the assessment year under consideration is 2004-05. More than eleven years have passed from the relevant assessment year and, therefore, whether the set off of the loss determined in this year was claimed by the assessee in any of the subsequent year. In our opinion, if no set off of loss is claimed by the assessee in the subsequent year, then the quantum of the loss, whether it is `10.55 crores or `12.44 crores, became only of academic nature. Learned DR fairly submitted that if no set off of loss is claimed in the subsequent year, the appeal can be treated as of academic nature having no tax effect either for the assessee or for the Revenue. The assessee, vide letter dated 16th August, 2016, has submitted in writing that the assessee company has not set off the above mentioned loss incurred in assessment year 2004-05 against any income of the assessee company in the subsequent years.
Once no set off of loss determined in assessment year 2004-05 is claimed by the assessee in the subsequent year, and the time limit for carry forward or set off of loss has expired, in our opinion, the amount of loss determined does not have any tax effect so far as the assessee or the Revenue is concerned. We, therefore, hold that Revenue’s appeal has effectively nil tax effect. Therefore, the CBDT Circular No. 21/2015 dated 10th December, 2015 is squarely applicable. Learned counsel for the assessee was also fair enough to say that the assessee’s cross-objection should also be treated as of academic nature because the quantum of loss determined will have no consequence to the assessee also. In view of the above, we deem it
4 ITA-1341/Del/2012 & C.O.-107/Del/2014 proper to dismiss the Revenue’s appeal as well as assessee’s cross- objection being of academic nature only.
In the result, the appeal of the Revenue and the cross-objection of the assessee both are dismissed. Decision pronounced in the open Court on 05.09.2016.