Indfos Industries P.Ltd ( Previously ... vs Assessee

/Assessee by : Ms.Heena Doshi /Revenue by : Shri Sachidanand Dubey

Date of Hearing : 1st January, 2015 Date of Pronouncement : 7th January, 2015

ORDER

PER R.C.SHARMA (A.M.) :

This appeal is filed by the assessee against the order of CIT(A),

dated 10-2-2012, for the assessment year 2008-09, in the matter of order

passed under Section 143(3) of the I.T. Act, wherein following two

grounds have been taken by the assessee :-

2. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeals)-5, Mumbai has erred in not dealing with ground No.2 which reads as under:

"Ground No.2.

The DCTO has denied the benefit of carry forward of loss of assessment year 2006-07 after rejecting the contention of the appellant that it is a public company and has erroneously denied the said benefit on the score that the appellant is a private company which fact is fundamentally erroneous."

2 ITA No.5571/2013 He ought not to have done so.

3. Plain reading of section 79 of the Act shows that it applies only when the carry forward of the losses is accompanied by claim for set off and not otherwise."

2. Rival contentions have been heard and record perused. Facts in

brief are that assessee is engaged in the business of manufacture and

sale of pressure and temperature controls, hydraulic trolley and overload

protector. The appeal is delayed by 454 days. We had considered the

contention of ld. AR and DR with respect to the reasons of delay and also

gone through the affidavit filed by the assessee supporting the reason of

delay and found that due to long illness of Senior Partner of Chartered

Accountant Firm, who was supposed to file appeal, which was followed by

his death, the delay has occurred. The assessee has filed an affidavit to

support the reasons for delay and request for condonation of delay. We

are satisfied that there was a reasonable cause for delay, keeping in view

the interest of substantial justice as pronounced by the Hon‟ble Supreme

Court in the case of Collector, Land Acquisition Vs. Mst.

Katiji: 167 ITR 471, we condone the delay and appeal is being heard

on merit.

3. In ground No.1, assessee has alleged that the CIT(A) has not

decided the ground No.2 taken for carry forward of loss of the assessment

year 2006-07. The assessee has also alleged application of Section 79 on

the plea that assessee has just claimed carried forward loss and not its

set up. From the record, we found that for the year under consideration,

the return of income was filed claiming carried forward of losses of

Rs.2,55,59,314/- relating to Assessment Year 2006-07 under the head

"business income". The Assessee also claimed loss of Rs. 39,51,937/- 3 ITA No.5571/2013

relating to Assessment Year under consideration. The said amount of

Rs.39,51,937/- included Rs.26,53,937/- being unabsorbed depreciation

for the Assessment Year 2006-07. In the Assessment Order dated 22nd

December, 2010 the AO applied section 79 of the Act to the carry forward

of the losses on the ground of change in controlling shareholding of 51%

but made reference only to disallowance of Rs.26,53,937/- as "losses"

which amount was in fact unabsorbed depreciation of assessment year

2006-07. No reference was made to disallowance of claim for carry

forward of loss of Rs.2,55,59,314/- relating of assessment year 2006-07 in

the assessment order. It was clarified that while drafting the appeal to

CIT(A) for the Assessment Year 2008-09 under consideration, the CA of

assessee overlooked the omission on the part of the AO concerning the

claim for carry forward of loss of Rs. 2,55,59,314/- relating to Assessment

Year 2006-07 and made reference only to Rs. 26,53,937/- which in fact

was unabsorbed depreciation. Before the CIT(A), the assessee contested

application of section 79 of the Act but raised the plea only relating to Rs.

26,53,937/- which plea was allowed on the ground of the same being

unabsorbed depreciation and did not attract section 79 of the Act. The

CIT(A) has not dealt with the contention of the Assessee that section 79

of the Act did not apply in relation to carry forward of the losses and that

section 79 of the Act would apply only when there was "set off' claimed of

the carried forward losses.

4. In view of the above discussion and also ground taken by the ld AR

that the CIT(A) has not decided the ground with regard to carried forward 4 ITA No.5571/2013

loss, we restore the appeal to the file of CIT(A) for deciding the issue

afresh as per law after giving due opportunity to the assessee.

5. In the result, appeal filed by the assessee is allowed in part for statistical purposes.

Order pronounced in the open court on this 7th January.2015.

7th Jan,2015

Sd/- Sd/- ( ) ( ) (VIJAY PAL RAO) (R.C.SHARMA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER Mumbai; Dated 07/01/2015 /pkm, PS Copy of the Order forwarded to : 1. / The Appellant 2. / The Respondent. 3. / The CIT(A) Mumbai. 4. / CIT 5. / DR, ITAT, Mumbai

6. Guard file. / BY ORDER,

//True Copy//

(Asstt. Registrar) / ITAT, Mumbai