Deccan Leathers Limited, Hyderabad vs Assessee

This is an appeal filed by the assessee-company for the Assessment Year (AY) 2009-10 against the order of the Commissioner of Income Tax(Appeals), Vijayawada, dated 15-07-2014. The appellant- company raised the following grounds:

"1. On the facts and circumstances of the case and the law Learned Commissioner of Income Tax (Appeals), Vijayawada erred in sustaining the order of the Asst. Commissioner of Income Tax, Circle 8(1), Hyderabad in disallowing the claim of set off of brought forward business loss of Rs. 14,51,774 for AY. 2006-07 and Rs. 21,62,491/- for AY. 2008-09 against the profits of the AY. 2009-10.

:- 2 -: I.T.A.No. 1484/Hyd/2014 M/s. Deccan Leathers Ltd.,

2. The order made by the Learned Commissioner of Income Tax (Appeals), Vijayawada is bad in law, arbitrary, contrary to the provisions of law and against the principles of natural justice.

3. Without considering the facts and circumstances and amounts of losses to be set off the Learned Commissioner of Income Tax (Appeals), Vijayawada is wrong in agreeing with the view of the assessing officer in disallowing the claim of set off of losses of the Appellant. The Learned Commissioner of Income Tax (Appeals), Vijayawada ought to have consider the fact that still there are unabsorbed losses relating to AY. 2006-07 and 2008-09 for being set off against the profits of the Assessment Year in discussion.

4. The Learned Commissioner of Income Tax (Appeals) is wrong in disallowing the claim of set off of loss of Rs. 21,62,491 for AY. 2008-09 against the profits of the assessment year under consideration since the appeal is pending before CIT(Appeals)-II, Hyderabad.

5. For these reasons and those which may be urged at the time of hearing of appeal and on the facts and circumstances of the case the addition of Rs. 36,14,265 confirmed by CIT(Appeals) may be deleted. The appellant prays that the consequential order made by the Learned ACIT, Circle 8(1), Vijayawada may be modified accordingly.

6. The appeal craves leave to add, to alter, amend, modify, substitute, delete and/or rescind all or any of the grounds of appeal on or before the final hearing, if necessity so arises".

2. The brief facts of the case are that, the appellant is a limited company engaged in the business of manufacture of finished leather goods. For the AY. 2009-10, the appellant had filed return of income on 30-09-2009 declaring NIL income. Against the said return of income, assessment was completed by the ACIT, Circle-8(1), Hyderabad vide order dt. 30-11-2011 u/s. 143(3) of the Income Tax Act, 1961 (Act) at a total income of Rs. 36,14,265/-. The disparity between the returned and assessed income was on account of disallowance of setoff of brought forward losses for the AY. 2006-07 and 2008-09 of Rs. 14,51,774/- and Rs. 21,62,491/- respectively on the ground that as per the assessment records, there was no carry forward loss entitled to be carried forward as per the assessment order for the AY. 2008-09. Being aggrieved, the :- 3 -: I.T.A.No. 1484/Hyd/2014 M/s. Deccan Leathers Ltd.,

appeal was filed before CIT(A), who vide order dt. 15-07-2014 had dismissed the appeal. Aggrieved by this, the appellant-company had come up with the present appeal before us.

3. It was argued before us by the Ld. AR that the CIT(A) was not justified in dismissing the appeal in as much as the additions made in the AY. 2008-09 are subject matter of appeal before the CIT(A). On the other hand, Ld. DR supported the orders of lower authorities.

4. We heard the rival parties and perused the orders of lower authorities. It was submitted before us that the appeal for the AY. 2008- 09 is still pending for disposal before the CIT(A). If the issue in the appeal is decided in favour of the appellant, there would be carry forward losses. At this juncture, it would not be appropriate to pass an order accepting the contention of the appellant. However, in the interest of justice, we deem it fit to restore the matter to the file of CIT(A) and dispose-off this appeal after the appeal for AY. 2008-09 is disposed off. With these directions, the appeal is disposed off accordingly.

5. In the result, the appeal is partly allowed for statistical purposes.

Order pronounced in the open Court on 29th May, 2015

Sd/- Sd/-

(ASHA VIJAYARAGHAVAN) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER

Hyderabad, Dated 29th May, 2015

TNMM :- 4 -: I.T.A.No. 1484/Hyd/2014 M/s. Deccan Leathers Ltd.,

Copy to :

1. M/s. Deccan Leathers Ltd., Plot No. 25, IDA Phase-1, Patan cheru, Medak District, Hyderabad.

2. The Asst. Commissioner of Income Tax, Circle-8(1), Hyderabad.

3. CIT(Appeals), Vijayawada.

4. CIT-II, Hyderabad.

5. D.R. ITAT, Hyderabad.

6. Guard File.