ITO, WARD - 2(3), KOLKATA, KOLKATA vs. M/S. SUTTON & SONS (INDIA) PVT. LTD., KOLKATA

PDF · subscribers
ITA 1563/KOL/2010Status: DisposedITAT Kolkata02 March 2016AY 1999-20002 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the issue of the genuineness of the expenditure leading to the loss was not examined by the AO or the CIT(A). Furthermore, the assessee had not produced books of account or any other details regarding these expenses before the AO. In light of these circumstances, the Tribunal was of the view that the matter should be examined afresh at the AO's level to decide whether the loss claimed could be carried forward. Consequently, the Tribunal set aside the orders of the lower authorities and remitted the matter back to the AO to decide the claim of loss for carry forward afresh, after affording the assessee a reasonable opportunity of being heard. The appeal of the revenue was allowed for statistical purposes.

What were the facts?

The assessee, Sutton & Sons (India) Pvt. Ltd., filed its return for Assessment Year 1999-00 on December 30, 1999, declaring a total loss of Rs. 99,42,981/-. The Assessing Officer (AO), DCIT, CC-XVIII/Kolkata, framed an assessment under Section 144 of the Income-tax Act, 1961, disallowing the loss claim because the assessee failed to produce any evidence, including books of account. The assessee appealed to the Commissioner of Income-tax (Appeals) [CIT(A)], who allowed the claim, finding the loss to be on account of genuine expenses. The Revenue is aggrieved by the CIT(A)'s order and has filed an appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether, on the facts and circumstances of the case, the learned CIT(A) erred in directing the AO to allow the benefit of carry forward of loss claimed by the assessee, the genuineness of which was never examined at the assessment or appellate stage? (Question of law and fact, turning on Section 144 and the principles of natural justice). Assessee's Contention: Not recorded in the judgment. Revenue's Contention: The CIT(A) erred in allowing the benefit of carry forward of loss without its genuineness being examined at either the assessment or appellate stage. The AO had framed the assessment under Section 144 due to the assessee's failure to produce evidence, including books of account.

Which sections of the Income-tax Act were involved?

Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C ” BENCH: KOLKATA

Before: Shri Mahavir Singh, JM & Shri M. Balaganesh, AM]

Hearing: 09.02.2016Pronounced: 02.03.2016

ORDER

Per Shri Mahavir Singh, JM:

1.

This appeal by revenue is arising out of order of CIT(A)-I, Kolkata vide Appeal No. 331/CIT(A)-1/Wd-2(3)/08-09 dated 07.06.2010. Assessment was framed by DCIT, CC- XVIII/Kolkata u/s. 144 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for Assessment Year 1999-00 vide his order dated 26.03.2002.

2.

The only issue in this appeal of revenue is against the order of Cit(A) in directing the AO to allow benefit of carry forward loss claimed by assessee as genuine and according to revenue the same was never examined at the stage of assessment. For this, revenue has raised following ground no.3:

3. That on the facts and circumstances of the case the Ld. CIT(A) has erred in directing the AO to allow benefits of carry forward of loss claimed by the assessee genuineness of which was never examined either at assessment stage or appellate stage.”

3.

Briefly stated facts are that the assessee filed its return of income on 30.12.1999 declaring total loss of Rs.99,42,981/-. The AO framed assessment u/s. 144 of the Act disallowing the claim of loss as the assessee could not produce any evidence before the AO including the books of account. Aggrieved, assessee preferred appeal before CIT(A), who allowed the claim of the assessee by observing that the loss claimed is on account of expenses which are genuine. Aggrieved, now revenue is in second appeal before tribunal.

4.

We have heard rival submissions and gone through facts and circumstances of the case. We find that this issue was not examined at the level of the AO or CIT(A) in respect to genuineness of expenditure. Even the assessee has not produced the books of account before the AO or any other details in respect to these expenses. In such circumstances, we are of the view that let the issue be examined afresh at the level of AO to decide the claim of loss to be carried

Recent GST High Court judgments

Search GST case law →