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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”, HYDERABAD
Before: SHRI K.NARASIMHA CHARY & SHRI MADHUSUDAN SAWDIA
अपीलधर्थी / Appellant प्रत्यर्थी / Respondent निर्धाररती द्वधरध/Assessee by: Shri P.Murali Mohan Rao, Ld.AR रधजस्व द्वधरध/Revenue by: Ms. Sheetal Sarin, DR सुिवधई की तधरीख/Date of hearing: 15/07/2024 घोर्णध की तधरीख/Pronouncement on: 06/08/2024 आदेश / ORDER PER K. NARASIMHA CHARY, J.M: Aggrieved by the order dated 12/02/2024 passed by the learned Principal Commissioner of Income Tax (Appeals) (“Ld. PCIT(A)”)-11, Hyderabad, in the case of Sudhakar Reddy Nalla (“the assessee”) for the assessment year 2017-18, assessee preferred this appeal.
The assessee is engaged in the business of film production and film distribution. For the assessment year (A.Y.) 2017-18, the assessee filed his return of income on 14.07.2017, declaring “Nil” income after set off of 2 I.T.A.No.233/Hyd/2024, A.Y.2017-18 Sudhakar Reddy Nalla, Hyderabad carried forward losses to the tune of Rs.2,75,93,255/-. Subsequently, there was a search and seizure operation u/s 132 of the Income tax Act, 1961 (“the Act”) conducted on 28.01.2021, covering the case of the assessee and pursuant thereto, proceedings u/s 153C of the Act for the A.Y.2015-16 to 2021-22 were initiated.
In so far as the A.Y.2017-18 is concerned, the Assessing Officer concluded the assessment vide order dated 27.03.2023 by disallowing set off of carried forward losses on the ground that while passing the order u/s 143(3) r.w.s. 153C for the A.Y.2016-17, there was an assessed income and therefore no loss could be allowed to be carried forward.
In appeal, the Ld.PCIT(A) also concurred with the said opinion of the Assessing Officer and held that in as much as there was assessed income for the A.Y.2016-17 vide order dated 30.03.2023 passed u/s 153C of the Act, no loss was available to the assessee to be carried forward. On that premise, the Ld.PCIT(A) dismissed the appeal.
Assessee, therefore, filed this appeal and contended that the order dated 30.03.2023 passed u/s 153C of the Act for the A.Y.2016-17 was quashed by the Ld.CIT(A) in appeal against such order. He submitted a copy of the order dated 04.06.2024 passed by the Ld.CIT(A) for the A.Y.2016-17, wherein, the Ld.CIT(A) clearly noted that in terms of decision of the Hon'ble Supreme Court, issuance of notice u/s 153C for the A.Ys. 2015-16 and 2016- 17 was bad in law and on that ground, such assessment was liable to be quashed. The Ld.CIT(A) accordingly quashed the assessment for the A.Y.2016-17. Copy of that order forms part of the record.
Though the Ld.DR vehemently opposed the relief to be granted to the assessee, there is no contradiction of the fact that the assessment for the A.Y.2016-17 was quashed by the first appellate authorities and therefore, there was no assessable income for such year.
3 I.T.A.No.233/Hyd/2024, A.Y.2017-18 Sudhakar Reddy Nalla, Hyderabad
On a careful consideration of these facts, we find that since the assessment order for the A.Y.2016-17 is no longer in existence, there cannot be any assessable income for such year and according to the Ld.AR, the losses available for the A.Y.2016-17 now continue to be available for the A.Y.2017-18 also. We, therefore, considering the said submission in the light of the copy of the order of the fist appellate authority for the A.Y.2016- 17 direct the Assessing Officer to consider the available carried forward losses for the A.Y.2017-18 and if so to delete the disallowance of set off of carried forward losses. Grounds are answered accordingly.
In the result, appeal of the assessee is allowed accordingly. 9. Order pronounced in the open court on this the 6th day of August, 2024.