MR. JHAMU SUGHAND, MUMBAI v. THE ITO 11(1)2, MUMBAI

ITA 2178/MUM/2009 | 2005-2006
Pronouncement Date: 22-09-2010 | Result: Partly Allowed

Appeal Details

RSA Number 217819914 RSA 2009
Assessee PAN AAJPS0695K
Bench Mumbai
Appeal Number ITA 2178/MUM/2009
Duration Of Justice 1 year(s) 5 month(s) 14 day(s)
Appellant MR. JHAMU SUGHAND, MUMBAI
Respondent THE ITO 11(1)2, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-09-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted J
Tribunal Order Date 22-09-2010
Date Of Final Hearing 16-09-2010
Next Hearing Date 16-09-2010
Assessment Year 2005-2006
Appeal Filed On 08-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH MUMBAI. BEFORE SHRI D.K.AGARWAL (JUDICIAL MEMBER) AND SHRI PRAMOD KUMAR(ACCOUNTANT MEMBER) I.T.A NO. 2178/ MUM/2009 ASSESSMENT YEAR:2005-06 JHAMU SUGANDH .APPELLANT (THROUGH JUGAL SUGANDH STATED TO BE LEGAL HEIR) 3-C RAJ PIPLA CHS LTD. 352 LINKING ROAD SANTACRUZ MUMBAI-54. PA NO.AAJPS 0695 K VS INCOME TAX OFFICER RESPONDENT WARD 11(1)(2) MUMBAI. APPELLANT BY : SHRI R.PRASAD RAO RESPONDENT BY : SHRI SUMEET KUMAR (DR) O R D E R PER PRAMOD KUMAR: 1. THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTE D AGAINST THE ORDER DATED 19.12.2008 OF LD CIT (A)-XI MUMBAI IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT YEAR 2005-06 2. THE FIRST GRIEVANCE THAT WE ARE REQUIRED TO ADJ UDICATE IN THIS APPEAL IS WHETHER OR NOT THE CIT (A) WAS JUSTIFIED IN UPHOLDI NG THE DISALLOWANCE IN RESPECT OF INTEREST OF RS. 30 76 158. THAT IS THE ONLY GROUND SET OUT IN THE MEMORANDUM OF APPEAL FILED BEFORE US. ITA NO.2178/M/2009 JHAMU SUGANDHA 2 3. SO FAR AS THIS GRIEVANCE OF THE ASSESSEE IS CONC ERNED THE RELEVANT MATERIAL FACTS ARE LIKE THIS. THE ASSESSEE WAS ENG AGED IN THE BUSINESS OF PRODUCING DISTRIBUTING AND FINANCING OF FILMS. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD SHOWN UNSECURED LOANS AMOUNTING TO RS 14 70 83 270/- IN T HE BALANCE SHEET AND CLAIMED DEDUCTION IN RESPECT OF INTEREST OF RS 30 7 0 158/- PAID ON THESE BORROWINGS. IT WAS ALSO NOTICED THAT THE ASSESSEE HAD HIMSELF GRANTED LOANS OF RS 13 90 75 795/- AND NO INTEREST IN RESPECT OF THESE LOANS WAS CHARGED. IT WAS IN THIS BACKDROP AND IN THE ABSENCE OF ANY EXPLANATION BY THE ASSESSEE FOR HAVING GRANTED INTEREST FREE LOANS OUT OF INTEREST BEARING FUNDS THAT THE INTEREST PAID BY THE ASSESSEE WAS DISALLOW ED. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CI T (A). IT WAS INTER ALIA SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE HAD SUF FICIENT NON-INTEREST BEARING FUNDS TO COVER THIS AMOUNT OF ALLEGED NON I NTEREST BEARING ADVANCES. THE CIT (A) UPHELD THE DISALLOWANCE IN PRINCIPLE BU T REMITTED THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR CERTAIN MODIF ICATION IN THE DISALLOWANCE. THOSE MODIFICATIONS FOR THE REASONS WE WILL SET OU T IN A LITTLE WHILE ARE NOT REALLY RELEVANT FOR THE PURPOSES OF THIS ADJUDICATI ON AND WE NEED NOT THEREFORE SET OUT THE SAME. THE ASSESSEE STILL NO T SATISFIED WITH THE DISALLOWANCE HAVING BEEN CONFIRMED BY THE CIT (A) IN PRINCIPLE IS IN APPEAL BEFORE US. 4. SHRI RAO LEARNED COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ASSESSEE WAS IN THE BUSINESS OF PRODUCING DISTRIBUTING AND FINANCING FILMS AND THAT WHAT HAVE BEEN TERMED AS INTEREST FREE LOANS ARE IN FACT BUSINESS ADVANCE DURING THE COURSE OF ASSESSEES CORE BUSINESS ACTIV ITIES. IT WAS SUBMITTED THAT THESE ADVANCES DID NOT CARRY ANY INTEREST BUT THESE ADVANCES HAVING BEEN EXTENDED DURING THE COURSE OF ASSESSEES BUSIN ESS AND FOR THE PURPOSES OF BUSINESS THESE ADVANCES CANNOT BE CONSIDERED AS DIVERSION OF FUNDS FOR NON-BUSINESS PURPOSES. AS LONG AS THE FUNDS BORROW ED BY THE ASSESSEE HAVE ITA NO.2178/M/2009 JHAMU SUGANDHA 3 BEEN USED OUT FOR THE PURPOSES OF BUSINESS EVEN IF AS INTEREST FREE ADVANCES THERE CANNOT BE ANY REASON TO DISALLOW INTEREST PAI D IN CONNECTION WITH THE SAME. IT WAS ALSO CONTENDED THAT IN ANY EVENT IN TEREST FREE FUNDS AVAILABLE TO THE ASSESSEE ARE FAR MORE THAN THE ADVANCES WHIC H ARE TREATED BY THE AO AS INTEREST FREE LOANS GRANTED BY THE ASSESSEE. IT WAS THUS PLEADED THAT AS LONG AS INTEREST FREE ADVANCES EVEN THAT BE SO AR E LESS THAN INTEREST FREE FUNDS AVAILABLE TO THE ASSESSEE DISALLOWANCE OF IN TEREST IS UNCALLED FOR. RELIANCE WAS PLACED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. RELIANCE UTILITIES AND POWER LTD. 3 13 ITR 340(BOM). IN RESPONSE TO BENCHS QUERY WHETHER THESE PLEADINGS W ERE ALSO TAKEN BEFORE THE AUTHORITIES BELOW OUR ATTENTION WAS INVITED TO PARAGRAPH 5.1 OF THE CIT (A)S ORDER WHEREIN THE ASSESSEES PLEA TO THE EF FECT THAT THE AO HAS NOT TAKEN INTO CONSIDERATION THE AVAILABILITY OF INTERE ST FREE FUNDS HAS BEEN TAKEN NOTE OF. ON THE STRENGTH OF INTER ALIA THE SE ARGUMENTS WE WERE URGED TO DELETE THE IMPUGNED DISALLOWANCE OF INTEREST AMO UNTING TO RS 30 76 158/- .SHRI KUMAR LEARNED DEPARTMENTAL REPRESENTATIVE O N THE OTHER HAND VEHEMENTLY RELIED UPON THE ORDERS OF THE AUTHORITIE S BELOW. IT WAS POINTED THAT THE ASSESSEE DID NOT MAKE ANY SUBMISSIONS OR G IVE ANY EXPLANATION BEFORE THE ASSESSING OFFICER AND EVEN BEFORE THE CI T (A). HE SUBMITTED THAT SPECIFIC COMPUTATION OF INTEREST FREE FUNDS WAS NOT FURNISHED. LEARNED DEPARTMENTAL REPRESENTATIVE ALSO SUBMITTED THAT THE RE IS NOTHING ON RECORD TO INDICATE THAT INTEREST FREE ADVANCES GIVEN BY TH E ASSESSEE ARE GIVEN IN THE COURSE OF BUSINESS OPERATION. WE WERE THUS URGED TO UPHOLD THE DISALLOWANCE AND DECLINE TO INTERFERE IN THE MATTER . 5. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PE RUSED THE MATERIAL ON RECORD WE ARE OF THE CONSIDERED VIEW THAT THE LEGA L PLEA RAISED BY THE ASSESSEE IS INDEED CORRECT IN PRINCIPLE AND MERITS ACCEPTANCE. AS HELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF RELIAN CE UTILITIES AND POWER CO. (SUPRA) AS LONG AS THE ASSESSEE HAS SUFFICIENT INTEREST FREE FUNDS TO COVER ANY NON INTEREST BEARING ADVANCES DISALLOWANCE OF THE INTEREST ON ITA NO.2178/M/2009 JHAMU SUGANDHA 4 BORROWINGS CANNOT BE MADE ON THE GROUND THAT THE AS SESSEE HAS GIVEN INTEREST FREE ADVANCES. IN SUCH A SCENARIO IT IS WHOLLY IMMATERIAL AS TO WHETHER OR NOT INTEREST FREE ADVANCES ARE GIVEN FOR BUSINESS CONSIDERATION OR IN THE COURSE OF GENUINE BUSINESS ACTIVITIES OF THE ASSESSEE. HOWEVER AS LEARNED DEPARTMENTAL REPRESENTATIVE RIGHTLY POINTED OUT THAT ALL THESE SPECIFIC DETAILS WHICH ESTABLISH THAT THE ASSESSEE HAD SUFFICIENT NON INTEREST BEARING FUNDS TO COVER INTEREST FREE ADVANCES WERE NOT PLACED BEFORE ANY OF THE AUTHORITIES BELOW. LEARNED COUNSEL FOR THE ASS ESSEE HAS FILED THESE DETAILS BEFORE US FOR THE FIRST TIME. THEREFORE W HILE UPHOLDING THE PLEA OF THE ASSESSEE IN PRINCIPLE WE ALSO DEEM IT FIT AN D PROPER TO REMIT THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR THE LIMITE D PURPOSE FOR VERIFYING THE FACTUAL CONTENTIONS EMBEDDED IN THE SUBMISSIONS I.E . WHETHER THE QUANTUM OF INTEREST FREE FUNDS AVAILABLE TO THE ASSESSEE WE RE INDEED MORE THAN THE INTEREST FREE ADVANCES GIVEN BY THE ASSESSEE. IN C ASE LEARNED COUNSELS SUBMISSIONS THAT THE INTEREST FREE FUNDS AVAILABLE TO THE ASSESSEE ARE INDEED MORE THAN INTEREST FREE ADVANCES IS FOUND TO BE COR RECT THERE WILL BE NO NEED TO GO INTO THE QUESTION AS TO WHETHER THE ADVANCES GRANTED BY THE ASSESSEE WERE IN THE COURSE OF BUSINESS AND ARE REQUIRED TO BE TREATED AS BUSINESS ADVANCE IN NATURE. THERE CAN NOT BE ANY QUARREL WI TH THE PROPOSITION THAT IN CASE THESE ADVANCES ARE BUSINESS ADVANCE IN NATURE THEN WHETHER OR NOT THESE ADVANCES ARE GIVEN OUT OF THE INTEREST FREE F UNDS WOULD BE WHOLLY IRRELEVANT INASMUCH AS THESE ADVANCES ARE NEVERTHEL ESS FOR THE PURPOSES OF BUSINESS BUT GIVEN THE STAND OF THE ASSESSEE REGA RDING AVAILABLILITY OF INTEREST FREE FUNDS THIS ASPECT OF THE MATTER MAY NOT REALLY BE NECESSARY TO EXAMINED. HOWEVER AS WE ARE REMITTING THE MATTER TO THE FILE OF THE ASSESSING OFFICER WE ALSO MAKE IT CLEAR THAT IN TH E EVENT THE ASSESSEE FAILS TO PROVE THE FIRST PLEA I.E. ON AVAILABLITY OF SUFFICI ENT NON INTEREST BEARING FUNDS OTHER ASPECT OF THE MATTER I.E. ADVANCES BEING IN T HE NATURE OF BUSINESS ADVANCE WILL BECOME RELEVANT AND WILL HAVE TO BE EX AMINED VIS--VIS NATURE OF ADVANCES GIVEN BY THE ASSESSEE. WITH THESE DIRE CTIONS WE REMIT THE ITA NO.2178/M/2009 JHAMU SUGANDHA 5 MATTER BACK TO THE FILE OF THE AO FOR RE-ADJUDICATI ON IN TERMS OF OUR OBSERVATIONS NOTED ABOVE. 6. THE ASSESSEE HAS ALSO RAISED A COUPLE OF ADDITIO NAL GROUNDS. THESE GROUNDS OF APPEAL ARE AS UNDER:- 1. THE CIT (A) ERRED IN LAW AND ON THE FACTS AND I N THE CIRCUMSTANCES OF THE CASE IN NOT DELETING ALLEGED DISALLOWANCE ON ACCOUNT OF BAD DEBTS WRITTEN OFF ` 17 79 000/-. THE SAME BEING A BUSINESS ADVANCE IN THE ORDINARY COURSE OF BUSINESS BE FULLY ALLOWED A S CLAIMED. 2. THE LD AO BE DIRECTED TO ALLOW BROUGHT FORWARD L OSS OF A.Y. 2004-05 BEING CONSEQUENTIAL IN THE EVENT AFTER APPEAL EFFE CT FOR THAT YEAR THE ASSESSED INCOME RESULTS IN A LOSS. 7. IN VIEW OF THE FACT THAT ABOVE GROUNDS OF APPEAL ARE PURELY LEGAL IN NATURE AND HAVING HEARD THE RIVAL CONTENTIONS ON TH E QUESTION OF ADMISSION OF THESE GROUNDS OF APPEAL WE ADMIT THE ADDITIONAL GROUNDS AND PROCEED TO DISPOSE OF THE SAME ON MERITS. 8. AS REGARDS THE ASSESSEES GRIEVANCE AGAINST THE CIT(A) CONFIRMING THE DISALLOWANCE OF RS 17 79 000/- IN RESPECT OF BAD D EBTS THE MATERIAL FACTS ARE LIKE THIS. 9. AS WE HAVE NOTED EARLIER THE ASSESSEE WAS PROD UCER DISTRIBUTOR AND FINANCER OF FILMS. IN THE COURSE OF ASSESSMENT PRO CEEDINGS IT WAS NOTED THAT THE ASSESSEE HAD WRITTEN OFF SUNDRY DEBTORS WHICH INTER ALIA INCLUDES RS 17 79 000/- RECOVERABLE FROM INTECH INTERNATIONAL. SINCE THE ASSESSEE DID NOT GIVE ANY DETAILS AS TO HOW THE AMOUNT HAD SO BE COME IRRECOVERABLE AND DID NOT ESTABLISH THAT THE WRITE OFF OF BAD DEBTS W AS PROPER THE AO ITA NO.2178/M/2009 JHAMU SUGANDHA 6 DISALLOWED THE CLAIM OF BAD DEBTS. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT (A) BUT WITHOUT ANY SUCCESS. 10. THE CIT (A) HAD CALLED A REMAND REPORT FROM THE ASSESSING OFFICER REGARDING THE AFORESAID AMOUNTS RECOVERABLE FROM IN TECH INTERNATIONAL AND IN THE SAID REMAND REPORT THE AO SUBMITTED TO THE ASSESSEE THAT THE AFORESAID AMOUNT WAS NOT AN INCOME ITEM WHICH IS OFFERED TO TAX . HAVING NOTED THAT THE AMOUNT OF RS 17 79 000/- HAS NOT BEE N TAKEN INTO INCOME IN EARLIER YEARS THE CIT (A) CONFIRMED THE DISALLOWA NCE. BEING AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 11. THE BASIC THRUST OF LEARNED COUNSELS SUBMISSIO N IS THAT THE AMOUNT OF RS 17 79 000/- WAS ADVANCED TO INTECH INTERNATIONAL FOR A FILM PRODUCTION PROJECT WHICH NEVER ACTUALLY TOOK OFF. IT IS SUBMI TTED THAT IN VIEW OF THIS FACT AND BEARING IN MIND THE NATURE OF BUSINESS OF THE A SSESSEE WHICH INCLUDES ADVANCING MONEY FOR THE PURPOSES OF MAKING FILMS I T IS NOT REALLY RELEVANT AS TO WHETHER OR NOT THE AMOUNT WRITTEN OFF HAS BEEN I NCLUDED IN THE INCOME OF THE EARLIER YEARS. LEARNED COUNSEL FOR THE ASSESSE E SUBMITTED THAT SECTION 36(2)(I) HAS TWO LIMBS IN THE SENSE THAT IT IS APPL ICABLE IN RESPECT OF SUCH DEBT OR PART THEREOF WHICH HAS BEEN TAKEN INTO ACC OUNT IN COMPUTING THE INCOME OF THE ASSESSEE OF ONE OF THE PREVIOUS YEAR AND IT ALSO INCLUDES MONEY LENT IN THE ORDINARY COURSE OF BUSINESS OF BA NKING OR MONEY LENDING WHICH IS CARRIED ON BY THE ASSESSEE. LEARNED COUNS EL FOR THE ASSESSEE THEN SUBMITS THAT SINCE THE ASSESSEE WAS ADMITTEDLY ENGA GED IN THE BUSINESS OF FINANCING FILMS AS HAS BEEN NOTED IN THE ASSESSMEN T ORDER ITSELF AND HAS ALSO BEEN HELD BY THE TRIBUNAL IN ANOTHER YEAR IN RESPEC T OF THE ASSESSEE THE AMOUNTS ADVANCED FOR FINANCING FILMS EVEN WHEN NOT INCLUDED IN THE INCOME OF ONE OF THE PREVIOUS YEAR WILL ALSO BE COVERED B Y THE PROVISIONS OF SECTION 36(2)(I) OF THE ACT. IT IS THUS ARGUED THAT THE CIT (A) HAS FALLEN IN ERROR IN NOT TAKING INTO ACCOUNT THE CORRECT LEGAL POSITION. HOWEVER IN RESPONSE TO QUERY FROM THE BENCH LEARNED COUNSEL ADMITTED THAT NONE OF THE FACTS SO ITA NO.2178/M/2009 JHAMU SUGANDHA 7 STATED AT THE BAR WERE BEFORE ANY OF THE AUTHORITIE S BELOW AND AT NO STAGE THE ASSESSEE HAD FURNISHED THE NATURE OF ADVANCED T O INTECH INTERNATIONAL OR OTHER COMPLETE DETAILS. HE HOWEVER HASTENED TO A DD THAT IF AN OPPORTUNITY IS GIVEN THE ASSESSEE WILL SUBMIT ALL THE COMPLETE DETAILS BEFORE US OR BEFORE THE ANY OF THE AUTHORITIES BELOW. IN EFFECT THUS IT WAS SUBMITTED THAT THE ASSESSEES CLAIM OF DEDUCTION AS BAD DEBTS IN RESPE CT OF AMOUNTS OF RS 17 79 000/- ADVANCED TO INTECH INTERNATIONAL IS SUS TAINABLE IN LAW IN PRINCIPLE AND THAT THE ASSESSEE IS PREPARED TO FURN ISH ALL THE RELEVANT DETAILS TO SUBSTANTIATE ITS CLAIM. ON THE OTHER HAND LEARN ED DEPARTMENTAL REPRESNETATIVE POINTED OUT THAT AS THE ASSESSEE DID NOT GIVE COMPLETE DETAILS BEFORE THE AUTHORITIES BELOW THE AUTHORITIES BELOW WERE FULLY JUSTIFIED IN DISALLOWING THE IMPUGNED CLAIM OF DEDUCTION. IT WA S SUBMITTED THAT THE ASSESSEE HAS NOT EVEN GIVEN THE BASIC RELEVANT DETA ILS BEFORE US AND THAT NO USEFUL PURPOSE WILL BE SERVED BY GIVING REPEATED OP PORTUNITIES TO THE ASSESSEE. IN ALL FAIRNESS HOWEVER LEARNED DEPART MENTAL REPRESENTATIVE DID NOT SERIOUSLY OBJECT TO THE MATTER BEING RESTORED T O THE FILE OF THE ASSESSING OFFICER FOR EXAMINATION OF ALL THE DETAILS BY THE A SSESSEE PROVIDED THE ASSESSEE IS READY TO FURNISH THE RELEVANT DETAILS A ND PROVIDED THE ASSESSEE DOES NOT RESORT TO DELAYING TACTICS. 12. WE FIND THAT THE DISALLOWANCE HAS BEEN CONFIRME D BY THE CIT(A) ONLY ON THE GROUND THAT THE AMOUNT WRITTEN OFF WAS NOT I NCLUDED IN THE INCOME OF PREVIOUS YEAR OR THE EARLIER YEARS BUT THEN THAT I S EXAMINING THE CASE OF THE ASSESSEE ON ONE OF THE LIMBS OF THE LEGAL PROVISION S. IN CASE THE AMOUNT ADVANCED CAN INDEED BE SAID TO BE IN THE COURSE OF MONEY LENDING BUSINESS OF THE ASSESSEE IT IS NOT NECESSARY THAT THE AMOUN T WRITTEN OFF MUST BE INCLUDED IN THE INCOME OF THE ASSESSEE FOR THE PREV IOUS YEAR OR ONE OF THE EARLIER YEARS. TO THAT EXTENT THE ASSESSEE IS CORR ECT IN PRINCIPLE BUT NONE OF THE AUTHORITIES BELOW HAS INDEED EXAMINED THE MATT ER ON MERITS IN THIS LIGHT AND THE ASSESSEE HAS NOT PROPERLY PRESENTED ALL THE RELEVANT FACTS OF THE CASE. THERE IS NO POINT IN GIVING A FINDING ON THE BASIS OF FACTS WHICH ARE ITA NO.2178/M/2009 JHAMU SUGANDHA 8 NOT ESTABLISHED. IN VIEW OF THESE DISCUSSIONS AND BEARING IN MIND ENTIRETY OF THE CASE WE DEEM IT FIT AND PROPER TO GIVE THE ASS ESSEE ONE MORE OPPORTUNITY OF PRESENTING HIS CASE BEFORE THE ASSES SING OFFICER AND FOR THAT LIMITED PURPOSE WE RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER. AS WE DO SO WE ALSO REFRAIN FROM MAKING ANY OBSERVATI ON ON MERITS OF ASSESSEES CLAIM SINCE RELEVANT BASIC FACTS ARE YET TO BE ESTABLISHED BY THE ASSESSEE AND ADD THAT THE ONUS IS COMPLETELY ON THE ASSESSEE TO FURNISH ALL SUCH DETAILS AS MAY BE NECESSARY TO SUBSTANTIATE TH E FACTUAL ELEMENTS AS EMBEDDED IN HIS PLEADINGS BEFORE US. IN CASE THE A SSESSEE FAILS TO DO SO OR RESORT TO ANY DILUTE TACTICS IN COMPLETING THE REMA ND PROCEEDINGS EXPEDITIOUSLY THE ASSESSING OFFIER WILL BE AT LIBE RTY TO TAKE SUCH ACTION AS HE MAY THINK FIT AND PROCEED TO DECIDE THE MATTER ON T HE BASIS OF MATERIAL ON RECORD. WITH THESE OBSERVATIONS ON THE SECOND ISS UE ALSO THE MATTER STANDS REMITTED TO THE FILE OF THE ASSESSING OFFICER 13. THAT LEAVE US ONLY ONE ISSUE AND THAT IS SECON D ADDITIONAL GROUND OF APPEAL. THE ASSESSEE IS AGGRIEVED THAT THE BROUGHT FORWARD LOSSES OF A.Y. 2004-05 HAS NOT BEEN SET OFF IN THE CURRENT YEAR. THE ASSESSEE HOWEVER FAIRLY ADMITS THAT EVEN THOUGH THE ASSESSEE HAD WRI TTEN OFF NEGATIVE INCOME FOR THE ASSESSMENT YEAR 2004-05 AS A RESULT OF ADD ITION MADE BY THE ASSESSING OFFICER THE RETURNED LOSS WAS CONVERTED INTO A POSITIVE FIGURE. IT IS HOWEVER POINTED OUT THAT THE ASSESSMENT FOR TH E ASSESSMENT YEAR 2004- 05 THE ASSESSEE IS NOW IN APPEAL BEFORE A CO-ORDIN ATE BENCH AND THE ASSESSEE IS ONLY PRAYING FOR CONSEQUENTIAL RELIEF I N CASE THE ASSESSEES APPEAL AGAINST THE ADDITION SO MADE FOR THE ASSESSMENT YEA R 2004-05 IS UPHELD AND INCOME FINALLY ASSESSED FOR A.Y. 2004-05 TURNS OUT TO BE A NEGATIVE FIGURE. 14. AS A PLAIN LOOK AT THE ADMITTED FACTS SHOWS TH E GRIEVANCE OF THE ASSESSEE IS PREMATURE AND WHOLLY ACADEMIC AT THIS S TAGE. AS THE THINGS STAND NOW THERE IS NO BROUGHT FORWARD LOSS FROM A.Y. 200 4-05 AND THEREFORE THERE IS NO QUESTION OF ANY SUCH LOSS BEING SET OFF AGAINST THE INCOME. THE ITA NO.2178/M/2009 JHAMU SUGANDHA 9 RELIEF WILL BE ADMISSIBLE ONLY WHEN THE FINALLY ASS ESSED INCOME FOR THE ASSESSMENT YEAR 2004-05 AS A RESULT OF THE APPELLA TE PROCEEDINGS TURNS TO BE A NEGATIVE FIGURE. SUFFICE TO SAY THAT IT IS OP EN TO THE ASSESSEE TO SEEK CONSEQUENTIAL RELIEF AT THAT STAGE AND THAT WE DO NOT SEE ANY NEED TO DEAL WITH THIS ISSUE AT PRESENT. ACCORDINGLY WE DISMIS S THIS GRIEVANCE OF THE ASSESSEE AS ACADEMIC AND PRE-MATURED. 15. IN THE RESULT APPEAL FILED BY THE ASSESSEE STA NDS PARTLY ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON 22 ND SEPTEMBER 2010 SD/- (D.K.AGARWAL) (JUDICIAL MEMBER) SD/- (PRAMOD KUMAR) (ACCOUNTANT MEMBER) MUMBAI DATED 22 ND SEPTEMBER 2010 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)-XI MUMBAI 4. COMMISSIONER OF INCOME TAX -XI MUMBAI 5. DEPARTMENTAL REPRESENTATIVE BENCH J MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR ITAT MUMBAI ITA NO.2178/M/2009 JHAMU SUGANDHA 10 DATE INITIALS 1. DRAFT DICTATED ON 16.9.2010 PS 2. DRAFT PLACED BEFORE AUTHOR 16.9.2010 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM/JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/J M 5. APPROVED DRAFT COMES TO THE SR. PS PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER ITA NO.2178/M/2009 JHAMU SUGANDHA 11