DCIT, NEW DELHI vs. M/S. WITS AGRIFOODS PVT. LTD., NEW DELHI

The captioned appeal has been filed at the instance of the revenue seeking to challenge the order passed u/s.143(3) of the IT Act, 1961 dated 04.11.2016 passed against the order of the Commissioner of Income Tax (A)-9, New Delhi (‘CIT(A)’ in short).

As per its grounds of appeal, the revenue has challenged the relief granted by the CIT(A) towards disallowance of Rs.23124337/- on account of losses with claimed on account of lower realizable value of closing stock.

When the matter was called for hearing, the Ld. DR for revenue brought to our notice that there is a short delay of around 53 days in filing of the appeal due to ongoing transfer and postings of officers in various cadre. It was pleaded that delay is short and inadvertent and does not cause any substantive prejudice to the other side. After a brief opposition, the Counsel for the assessee agreed for condonation of delay. The Delay being short and inadvertent, is condoned and admitted for adjudication as effective appeal.

At the beginning of the hearing, the Ld. Counsel for the assessee submitted that the whole proceedings before the Tribunal in the Revenue’s appeal is infructuous and academic in nature. It was pointed out that the assessee had filed a belated return of income declaring loss of Rs.5.01 crores. A part of the loss was disallowed and the assessed loss was brought down to Rs.2.70 crores. However, neither the returned loss nor the assessed loss is allowed to be carryforward to subsequent assessment years for set off against profits in view of the scheme of the Act. The assessee having filed belated return, has forfeited its right in law to carry forward the business loss to the subsequent assessment years. In this background, the disallowance of loss by the AO and its subsequent reversal by the CIT(A) has no impact on taxation as the loss eventually allowed by the CIT(A) is not entitled to be set off against taxable income in current year or subsequent year. This being the position, ongoing litigation is academic and hollow.

The Ld. DR for the Revenue did not rebut such averments on behalf of the assessee.

In the light of submissions made on behalf of the assessee, we see no reason to go into the merits of the allowability of the claim. As stated on behalf of the assessee, no prejudice is caused to the revenue by the allowability or otherwise of the loss claimed which is not entitled to be carry forward. Hence, the issue being academic, we do not see any warrant to visit the merits.

In the result, the appeal of the revenue is dismissed for statistical purpose.