Shri Hashmukhbhai Ganeshbhai Patel(HUF), Ankleshwar v. The Income tax Officer,Ward-4,, Baroda

ITA 831/AHD/2007 | 2003-2004
Pronouncement Date: 30-07-2010 | Result: Dismissed

Appeal Details

RSA Number 83120514 RSA 2007
Assessee PAN AABHP7335L
Bench Ahmedabad
Appeal Number ITA 831/AHD/2007
Duration Of Justice 3 year(s) 5 month(s) 6 day(s)
Appellant Shri Hashmukhbhai Ganeshbhai Patel(HUF), Ankleshwar
Respondent The Income tax Officer,Ward-4,, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 30-07-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 30-07-2010
Date Of Final Hearing 22-07-2010
Next Hearing Date 22-07-2010
Assessment Year 2003-2004
Appeal Filed On 22-02-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND D. C. AGRAWAL AM) ITA NO.831/AHD/2007 A.Y.: 2003-04 SHRI HASMUKHBHAI GANESHLAL PATEL (HUF) PROP. HINDUSTAN TRADE LINK PLOT NO.126/2/B GIDC ESTATE ANKLESHWAR VS THE INCOME-TAX OFFICER WARD BHARUCH PA NO AABHP 7335 L (APPELLANT) (RESPONDENT) APPELLANT BY SHRI M. K. PATEL AR RESPONDENT BY SHRI R. K. DHANESTA DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-VI BARODA DATED 05-12-2006 FOR ASSESSMENT YEAR 2003-04. 2. WE HAVE HEARD LEARNED REPRESENTATIVES OF BOTH THE P ARTIES PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND CONSIDERE D THE MATERIAL ON RECORD POINTED OUT BY THE PARTIES. 3. THE FIRST ISSUE ARISES ON GROUND NO.1 TO 5. THE SAME READ AS UNDER: 1. THAT THE LEARNED COMMISSIONER OF INCOME-TAX (AP PEALS) VI BARODA HAS GRIEVOUSLY ERRED IN CONFIRMING THE O RDER OF THE LEARNED ASSESSING OFFICER WHO HAD NOT GIVEN SET OFF OF UNABSORBED DEPRECIATION OF A. Y. 2002-03 AMOUNTING TO RS.31 64 143/-. 2. SIMILARLY THE LEARNED CIT(A) HAS ERRED IN NOT ADJUDICATING PROPERLY THE GROUND AS TO ADDITION OF RS.4 29 600/- EVEN THOUGH IT WAS A BALANCING CHARGE UNDER SECTION 41(2) OF THE ACT. ITA NO.831/AHD/2007 SHRI HASMUKHBHAI GANESHLAL PATEL (HUF) VS ITO BHAR UCH 2 3. THE APPELLANT BEGS TO RELY UPON THE SUBMISSIONS AND CASE LAW RELIED ON BEFORE BOTH THE LOWER AUTHORITIE S IN REGARD TO THE MAIN TWO GROUNDS. 4. THE REVISED RETURN FOR THE A. YS. 2002-03 AND 2003- 04 OUGHT TO HAVE TAKEN INTO ACCOUNT AND EVEN OTHERWISE THE ASSESSEE OUGHT TO HAVE BEEN GRANTED THE SET OFF OF UNABSORBED DEPRECIATION. 5. THAT THE ENTIRE REASONING ON FACTS AND IN LAW BY BOTH THE AUTHORITIES ON THE AFORESAID POINT ARE OTHERWIS E UNWARRANTED OF FACTS BAD IN LAW AND THEREFORE THE APPEAL OF THE APPELLANT BE ALLOWED IN FULL AS PRAYE D FOR. 4. THE ASSESSEE CHALLENGED THE DISALLOWANCE OF SET OFF OF UNABSORBED DEPRECIATION OF RS.31 64 143/- AND RS.4 29 600/- B EING SHORT TERM CAPITAL LOSS BEFORE THE LEARNED CIT(A). IT WAS NOTI CED BY THE AO THAT THE ASSESSEE HAD DEBITED RS.38 42 000/- UNDER THE HEAD MOTOR TANKER SALES LOSS IN RESPECT OF CLOSED BUSINESS OF TRANSPORTATI ON WHICH WAS STARTED ON 31-01-2002 AND WOUND UP ON 31-01-2003. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FILED REVISED R ETURNS OF INCOME FOR ASSESSMENT YEARS 2002-03 AND 2003-04 AND REQUESTED THAT SET OFF OF UNABSORBED DEPRECIATION OF RS.31 64 143/- FOR ASSES SMENT YEAR 2002-03 MAY BE GRANTED AGAINST INCOME OF ASSESSMENT YEAR 20 03-04 UNDER APPEAL. THE AO NOTICED THAT REVISED RETURN FOR ASSE SSMENT YEARS 2002-03 AND 2003-04 FILED ON 23-03-2006 WERE INVALID AS THE Y WERE FILED BEYOND THE TIME LIMIT PRESCRIBED U/S 139 (5) OF THE IT ACT . THE AO THEREFORE REMARKED THAT UNABSORBED DEPRECATION CAN BE ALLOWED ONLY AFTER IT IS DETERMINED AS A RESULT OF ASSESSMENT AND IN THE CAS E OF THE ASSESSEE IN THE VALID RETURN FOR ASSESSMENT YEAR 2002-03 NO DEP RECIATION WAS CLAIMED. THUS THE QUESTION OF GIVING EFFECT TO DE PRECIATION IN TERMS OF SECTION 32(2) OF THE IT ACT WOULD NOT ARISE. THE AO PLACED RELIANCE ON THE DECISION IN THE CASE OF SHRI RAJATHINAM TRANSPORT R EPORTED IN 199 ITR 203 (MADRAS). FURTHER THE SHORT TERM CAPITAL LOSS OF RS.38 42 000/- WAS ITA NO.831/AHD/2007 SHRI HASMUKHBHAI GANESHLAL PATEL (HUF) VS ITO BHAR UCH 3 ALLOWED TO BE CARRIED FORWARD BY THE AO. FURTHER O N VERIFICATION OF COMPUTATION OF TAXABLE INCOME FOR ASSESSMENT YEAR U NDER CONSIDERATION I.E. ASSESSMENT YEAR 2003-04 THE RECASTED PROFIT & LOSS ACCOUNT FOR THE FINANCIAL YEAR 2002-03 SUBMITTED BY THE ASSESSEE IS TAKEN AS THE BASIS. PROFIT AS PER RECASTED PROFIT & LOSS ACCOUNT IS WOR KED OUT AT RS.36 52 586/-. HOWEVER IT WAS SEEN BY THE AO THAT THE ASSESSEE HAS DEBITED LOSS OF RS.4 29 600/- ON SALE OF VEHICLES W HICH IS NOT PERMISSIBLE AS IT WAS CAPITAL LOSS AND IS ALREADY INCLUDED IN T HE SHORT TERM CAPITAL LOSS ALLOWED TO BE CARRIED FORWARD. THEREFORE THE LOSS OF RS.4 29 600/- WAS DISALLOWED AND ADDED BACK TO THE PROFIT OF RS.3 6 52 586/-. THE ADDITIONS WERE CHALLENGED BEFORE THE LEARNED CIT(A) AND THE SAME SUBMISSIONS WERE REITERATED. SAME DECISIONS WERE RE LIED UPON IN SUPPORT OF THE CLAIM THAT FOR CLAIMING UNABSORBED DEPRECIAT ION LIMITATION OF FILING OF RETURN IS NOT APPLICABLE. 5. THE LEARNED CIT(A) CONSIDERING THE FACTS AND CI RCUMSTANCES AND THE SUBMISSIONS OF THE ASSESSEE ALONG WITH CASE LAW S REJECTED THE CLAIM OF THE ASSESSEE AND DISMISSED THE APPEAL OF THE ASS ESSEE ON THE ABOVE GROUNDS. HIS FINDINGS IN PARA 4.3 TO 4.3.5 ARE REPR ODUCED AS UNDER: 4.3 I HAVE GONE THROUGH THE CONTENTIONS OF THE APP ELLANT AND THE ASSESSMENT ORDER. IT IS NOTICED THAT THE ASSESSING OFFICER HAD COMPUTED THE SHORT TERM CAPITAL LOSS OF RS.38 42 00 0/- AS UNDER: COST OF TRUCKS RS.1 65 89 900/- ADD: COST OF BODY BUILDING RS. 13 22 000/- RS.1 79 11 900/- LESS: CASH DISCOUNT RS. 8 49 900/- W.D.V. AS ON 31.3.2003 RS.1 70 62 000 W. D. V. AS ON 1.4.2003 RS.1 70 62 000/- LESS: SALE PROCEEDS RS.1 32 20 000/- SHORT TERM CAPITAL LOSS RS. 38 42 000/- ON THE OTHER HAND THE APPELLANT HAD MADE THE CLAIM AS UNDER: COST OF TRUCK RS.1 70 62 000/- DEPRECIATION @40% FOR 6 MONTHS RS. 34 12 400/- ITA NO.831/AHD/2007 SHRI HASMUKHBHAI GANESHLAL PATEL (HUF) VS ITO BHAR UCH 4 (FOR A. Y. 2002-03) W. D. V. AS ON 31.3.2002 RS.1 36 49 600/- W. D. V. AS ON 01.4.2002 RS.1 36 49 600/- LESS: SALE VALUE RS.1 32 20 000/- RS. 4 29 600/- 4.3.1. ORIGINAL RETURN IN THIS CASE WAS FILED ON 3 1.10.2003. THE VALID REVISED RETURN COULD HAVE BEEN FILED TILL 31 ST MARCH 2005. THE ASSESSMENT WAS COMPLETED ON 28.3.2006. IN THE O RIGINAL RETURN THE INCOME FROM BUSINESS OR PROFESSION WAS DISCLOSE D AT RS.2 91 430/-. MOTOR TANKER SALES LOSS WAS SHOWN AT RS.38 42 000/-. IN THE REVISED RETURN NET BUSINESS INCOME IS SHOWN AS RS.4 88 443/- AS UNDER: NET PROFIT RS.3385438 UNABSORBED DEPRECIATION RS.2896995 NET INCOME RS.4 88 443 4.3.2 SIMILARLY THE RETURN FOR A. Y. 2002-03 WAS ALSO REVISED IN WHICH DEPRECIATION OF RS.34 12 400/- WAS CLAIMED AND THE BALANCE OF RS.28 96 995/- WAS SOUGHT TO BE CARRIED FORWARD. IT IS SEEN THAT BOTH THE REVISED RETURNS WERE FILED ON 23 .3.2006 AND ARE FILED BEYOND THE TIME FOR FILING BELATED RETURNS AN D ALSO FOR FILING REVISED RETURNS WHICH ENDED ON 31.3.2005. IN OTHER WORDS THE REVISED RETURNS FOR A. Y. 2002-03 AND 2003-04 WERE INVALID RETURNS. 4.4.3. THE CASE LAWS RELIED UPON BY THE APPELLAN T NAMELY CIT VS. HARYANA HOTELS PVT. LTD. 276 ITR 521 (P & H) ARE DISTINGUISHABLE ON FACTS AS IN THAT CASE THE DELAY IN FILING REVISED RETURN WAS CONDONED U/S. 119 (2B) OF THE INCOME-TAX ACT BY COMPETENT AUTHORITY AND THE ASSESSING OFFICER WAS D IRECTED TO COMPLETE THE ASSESSMENT. IN THE PRESENT CASE THE RE VISED RETURNS ARE INVALID RETURNS. FURTHER THE EARLIER CASE RELATED T O A. Y. 1987-88 AND WITH EFFECT FROM 1.4.1988 UNDER SECTION 80 IT HAS B EEN SPECIFICALLY PROVIDED THAT NO LOSS WHICH HAS NOT BEEN DETERMINED IN PURSUANCE OF RETURN FILED IN ACCORDANCE WITH PROVISIONS OF SE CTION 139(3) SHALL NOT BE CARRIED FORWARD AND SET OFF UNDER SECTIONS 7 2(1) 73(2) 74 (1) 74(3) AND 74A(3). 4.3.4 THE OTHER CASE OF BRAHMAVAR CHEMICALS PVT. L TD. VS. CIT 239 ITR 867 (KAR) RELIED UPON BY THE APPELLANT IS ALSO DISTINGUISHABLE. IN THAT CASE ALSO THE ORIGINAL RET URN FOR A. Y. 1988- 89 WAS FILED ON 30 TH SEPTEMBER 1988 AND AS THE RETURN WAS LATE IN TERMS OF PROVISIONS OF SECTION 139(1) THE LOSS WAS NOT ALLOWED TO BE CARRIED FORWARD. UNDER THE SCENARIO IT WAS HELD THA T THE PERIOD OF LIMITATION PRESCRIBED UNDER SECTION 139(1) IS NOT A PPLICABLE FOR CARRY ITA NO.831/AHD/2007 SHRI HASMUKHBHAI GANESHLAL PATEL (HUF) VS ITO BHAR UCH 5 FORWARD OF UNABSORBED DEPRECIATION OF INVESTMENT AL LOWANCES. IN THAT CASE THE RETURN WAS VERY MUCH THOUGH BELATED B UT WAS WITHIN THE TIME LIMIT PRESCRIBED FOR FILING BELATED RETURN . IN THE INSTANT CASE IN THE ORIGINAL RETURN NO CLAIM WAS MADE IN REGARD TO UNABSORBED DEPRECIATION. 4.3.5 FURTHER THE REVISED RETURN WHICH REFERS TO T HE UNABSORBED DEPRECIATION OF EARLIER YEAR WAS NOT A V ALID RETURN IN THE FIRST PLACE. EVEN THE RETURN FOR EARLIER YEARS ON T HE BASIS OF WHICH DEPRECIATION WAS SOUGHT TO BE CARRIED FORWARD WAS A LSO INVALID. THE ORIGINAL RETURN FOR A. Y. 2002-03 FILED ON 30.7.200 2 DID NOT REFLECT ANY INCOME FROM BUSINESS OR PROFESSION. THE REVISED RETURN WAS INVALID RETURN AND THUS THE LOSS WAS NOT DETERMINED BY THE DEPARTMENT. SINCE THE UNABSORBED DEPRECIATION WAS N OT DETERMINED AT ALL THERE IS NO QUESTION OF CARRYING IT FORWARD AND SETTING IT OFF AGAINST THE NEXT YEARS INCOME. IN THE CASE OF GARD EN SILK WEAVING FACTORY VS. CIT 189 ITR 512 (SC) IT HAS BEEN HELD THAT UNABSORBED DEPRECIATION IS A SPECIES OF BUSINESS LOSS AND BOTH ARE NOT MUTUALLY EXCLUSIVE. IN MY CONSIDERED VIEW THEREFORE THE ASS ESSING OFFICER WAS JUSTIFIED IN NOT TAKING COGNIZANCE OF THE REVIS ED RETURNS FILED ON 23.3.2006 AND WORKING OUT THE SHORT TERM CAPITAL LO SS AS PER PROVISIONS OF SECTION 50(2) OF THE INCOME-TAX ACT. GROUND NO.1 & 3 ARE ACCORDINGLY DISMISSED. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS FILED BIFURCATED PROFIT & LOSS ACCOUNT FOR THE PERIOD FROM 31.1.2002 TO 31.1.2003 BEFORE THE AO FOR THE ASSESSMENT YEARS 2 002-03 AND 2003-04 AT THE ASSESSMENT STAGE COPY OF WHICH IS FILED AT P AGE 1 OF THE PAPER BOOK. HE HAS SUBMITTED THAT THE AO HAS COMPUTED THE INCOME IN THE ASSESSMENT ORDER BY TAKING THE NET PROFIT OF RS.36 52 586/- WHICH FIGURE WAS TAKEN FROM THE RECASTED CONSOLIDATED PROFIT & L OSS ACCOUNT. HE HAS SUBMITTED THAT SINCE PB-1 BIFURCATED FIGURES OF THE PROFIT & LOSS ACCOUNT FOR BOTH THE YEARS WAS BEFORE THE AO IN WHICH THE A SSESSEE CLAIMED DEPRECIATION IN THE ASSESSMENT YEAR 2002-03 THEREF ORE THE AO SHOULD HAVE ALLOWED CARRY FORWARD OF THE UNABSORBED DEPREC IATION FOR THE ASSESSMENT YEAR 2002-03 IN THE ASSESSMENT YEAR UNDE R APPEAL I.E. 2003-04. HE HAS REFERRED TO PB-2 WHICH IS ACKNOWLE DGEMENT OF FILING OF RETURN OF INCOME FOR ASSESSMENT YEAR 2002-03 WHICH WAS FILED ON 30- 7-2002 AND IS ACCOMPANIED BY COMPUTATION OF TOTAL I NCOME IN WHICH ITA NO.831/AHD/2007 SHRI HASMUKHBHAI GANESHLAL PATEL (HUF) VS ITO BHAR UCH 6 INCOME WAS DECLARED ONLY ON ACCOUNT OF INTEREST INC OME. HE HAS SUBMITTED THAT THOUGH THE ASSESSEE HAS NOT FILED AN D DISCLOSED ANY BUSINESS INCOME IN THE RETURN OF INCOME FOR ASSESSM ENT YEAR 2002-03 NOTE WAS APPENDED TO THE COMPUTATION OF INCOME THAT THE ASSESSEE HAD STARTED BUSINESS OF TRANSPORT VEHICLES AND PURCHASE D CHASSIS OF THE TRUCKS AND AMOUNT IS SPENT ON CONSTRUCTION OF BODY. THEREFORE THE AO SHOULD HAVE INFERRED THAT THE ASSESSEE STARTED BUSI NESS OF TRANSPORTATION ON WHICH DEPRECIATION SHOULD HAVE BEEN ALLOWED. HE HAS HOWEVER CONCEDED THAT THE ASSESSEE HAS NOT CLAIMED ANY DEPR ECIATION IN THE ORIGINAL RETURN FILED FOR THE ASSESSMENT YEAR 2002- 03. HE HAS FURTHER SUBMITTED THAT REVISED RETURNS WERE FILED FOR BOTH THE ASSESSMENT YEARS ON 23-03-2006 BEYOND THE PERIOD OF LIMITATION. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT EXPLANATION 5 T O SECTION 32(1) OF THE IT ACT WAS APPLICABLE FROM 01-04-2002 AND AS SUCH T HE SAME COULD HAVE BEEN APPLIED TO THE ASSESSMENT YEAR UNDER APPEAL AN D THE AO SHOULD HAVE ALLOWED SET OFF OF UNABSORBED DEPRECIATION FOR THE PRECEDING ASSESSMENT YEAR 2002-03. ON THE OTHER HAND THE LEA RNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMIT TED THAT THE ASSESSEE HAS NOT CLAIMED ANY DEPRECIATION IN THE ASSESSMENT YEAR 2002-03 AND NO BUSINESS INCOME IS DECLARED. THEREFORE THERE WAS N O DEPRECIATION AVAILABLE ON RECORD AND AS SUCH THERE IS NO QUESTIO N OF TREATING THE UNABSORBED DEPRECIATION TO BE CARRIED FORWARD FOR T HE SUBSEQUENT ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2003-04 UNDER APPEAL. THE LEARNED DR SUBMITTED THAT SINCE NO CLAIM WAS FILED IN THE A SSESSMENT YEAR UNDER APPEAL ALSO WITH REGARD TO CLAIM OF UNABSORBED DEPR ECIATION FOR THE EARLIER YEAR IN THE ORIGINAL RETURN OF INCOME THER EFORE THE ASSESSEE CANNOT CLAIM THE SAME IN THE INVALID REVISED RETURN . HE HAS SUBMITTED THAT THE ASSESSEE MADE A CLAIM OF SET OFF OF UNABSO RBED DEPRECIATION U/S 32(2) OF THE IT ACT ONLY IN THE REVISED RETURN WHIC H WAS ADMITTEDLY INVALID. THEREFORE IN THE ABSENCE OF ANY VALID CLA IM BEFORE THE AO; THE AO WAS JUSTIFIED IN NOT ENTERTAINING THE CLAIM OF T HE ASSESSEE. THE ITA NO.831/AHD/2007 SHRI HASMUKHBHAI GANESHLAL PATEL (HUF) VS ITO BHAR UCH 7 LEARNED DR SUBMITTED THAT SINCE THE RETURN OF INCOM E WAS ORIGINALLY FILED AT RS.2 91 434/- ON 31-10-2003 IN WHICH NO CLAIM OF UNABSORBED DEPRECIATION WAS MADE THEREFORE THE AO WAS JUSTI FIED IN REJECTING THE CLAIM OF THE ASSESSEE FOR UNABSORBED DEPRECIATION O N THE BASIS OF INVALID REVISED RETURN. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIALS AVAILABLE ON RECORD. SECTION 32(2) OF THE IT ACT PR OVIDES: [(2) WHERE IN THE ASSESSMENT OF THE ASSESSEE FUL L EFFECT CANNOT BE GIVEN TO ANY ALLOWANCE UNDER SUB-SECTION (1) IN ANY PREVIOUS YEAR OWING TO THERE BEING NO PROFITS OR G AINS CHARGEABLE FOR THAT PREVIOUS YEAR OR OWING TO THE PROFITS OR GAINS CHARGEABLE BEING LESS THAN THE ALLOWANCE THE N SUBJECT TO THE PROVISIONS OF SUB-SECTION (2) OF SECTION 72 AND SUB- SECTION (3) OF SECTION 73 THE ALLOWANCE OR THE PART OF THE ALLOWANCE TO WHICH EFFECT HAS NOT BEEN GIVEN AS TH E CASE MAY BE SHALL BE ADDED TO THE AMOUNT OF THE ALLOWANCE F OR DEPRECIATION FOR THE FOLLOWING PREVIOUS YEAR AND DE EMED TO BE PART OF THAT ALLOWANCE OR IF THERE IS NO SUCH ALLO WANCE FOR THAT PREVIOUS YEAR BE DEEMED TO BE THE ALLOWANCE FOR TH AT PREVIOUS YEAR AND SO ON FOR THE SUCCEEDING PREVIOU S YEARS.] 8. A READING OF SECTION 32(2) OF THE IT ACT MAKES I T CLEAR THAT A CARRIED FORWARD UNABSORBED DEPRECIATION IS DEEMED TO BE PAR T OF AS STAND ON THE SAME FOOTING AS CURRENT DEPRECIATION I.E. IN THE AS SESSMENT YEAR OF THE ASSESSEE IF FULL EFFECT CANNOT BE GIVEN TO ANY ALL OWANCE IN ANY PREVIOUS YEAR OWING TO THERE BEING NO PROFITS OR GAINS CHARG EABLE FOR THAT PREVIOUS YEAR THE ALLOWANCE OR PART OF THE ALLOWANCE TO WHI CH EFFECT HAS NOT BEEN GIVEN SHALL BE ADDED TO THE AMOUNT OF ALLOWANCE FOR DEPRECIATION FOR THE FOLLOWING PREVIOUS YEAR AND DEEMED TO BE THE PART O F THE SAID ALLOWANCE. HOWEVER THERE IS NO TIME LIMIT PROVIDED U/S 32(2) OF THE IT ACT FOR CARRY FORWARD OF UNABSORBED DEPRECIATION TO ANY SUBSEQUEN T YEAR. 9. IN THE INSTANT CASE THE ASSESSEE FILED RETURN O F INCOME FOR ASSESSMENT YEAR UNDER APPEAL I. E. 2003-04 ON 31-10 -2003 DECLARING ITA NO.831/AHD/2007 SHRI HASMUKHBHAI GANESHLAL PATEL (HUF) VS ITO BHAR UCH 8 TOTAL INCOME OF RS.2 91 434/- ALONG WITH AUDIT REPO RT IN PRESCRIBED FORM WHICH WAS ALSO ACCOMPANIED BY COMPUTATION OF TOTAL INCOME. COPIES OF THE SAME ARE ALSO FILED IN THE PAPER BOOK. IT WOULD SHOW THAT THE ASSESSEE HAS NOT MADE ANY CLAIM OF SET OFF OF UNABS ORBED DEPRECIATION IN THE RETURN OF INCOME SO FILED. SIMILARLY IN ASSESS MENT YEAR 2002-03 THE ASSESSEE FILED RETURN OF INCOME ON 30-07-2002 (PB - 2) IN WHICH THE ASSESSEE HAS NOT SHOWN ANY BUSINESS INCOME AND HAS ALSO NOT MADE ANY CLAIM OF DEPRECIATION. NO BUSINESS INCOME IS THUS D ECLARED AS WELL AS NO DEPRECIATION WAS ACCORDINGLY CLAIMED. THE ASSESSEE THEREAFTER FILED THE REVISED RETURNS OF INCOME FOR BOTH THE ASSESSMENT Y EARS 2002-03 AND 2003-04 ON 23-03-2006 MAKING THE CLAIM OF DEPRECIAT ION AND BOTH WERE INVALID RETURN ACCORDING TO THE FINDINGS OF THE AUT HORITIES BELOW. THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT CHALLENGED THE ABOVE FINDINGS OF THE AUTHORITIES BELOW THAT BOTH THE REVISED RETURNS WERE INVALID UNDER THE LAW. THEREFORE THE AUTHORITIES BELOW HAVE NOT RIGHTLY TAKEN COGNIZANCE OF THE SAME WHILE PASSING THE ASSESSMENT ORDER OR PASSING THE IMPUGNED ORDER. PB-3 IS THE COPY OF COMPUTATION OF INCOME FILED WITH ORIGINAL RETURN FOR ASSESSMENT YEAR 2002-03 IN WHIC H ONLY INTEREST INCOME HAS BEEN DECLARED WITHOUT DISCLOSING ANY BUS INESS INCOME OR DEPRECIATION. THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO THE NOTE GIVEN IN THE COMPUTATION OF INCOME TO SHOW THAT THE ASSESSEE STARTED BUSINESS OF TRANSPORTATION AND PURCHASED CHASSIS OF TRUCKS OF WHICH BODY HAD BEEN CONSTRUCT ED. HOWEVER IT IS NOWHERE MENTIONED AS TO IF ANY BUSINESS INCOME WAS EARNED ON ACCOUNT OF THE SA ME. IN THE ABSENCE OF ANY SPECIFIC NARRATION IN THE NOTE IT IS NOT CLE AR WHETHER ACTUALLY THE ASSESSEE STARTED THE BUSINESS OF TRANSPORTATION. TH E LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE THE AO DIRECTED T HE ASSESSEE TO FILE RECASTED ACCOUNTS FOR BOTH THE ASSESSMENT YEARS AND HE HAS FILED THE SAME AT THE ASSESSMENT STAGE (PB-1) TO SHOW BUSINES S INCOME WOULD NOT HELP THE ASSESSEE BECAUSE THERE WAS NO ASSESSMENT P ROCEEDING PENDING BEFORE THE AO FOR THE PRECEDING ASSESSMENT YEAR 200 2-03. THEREFORE ITA NO.831/AHD/2007 SHRI HASMUKHBHAI GANESHLAL PATEL (HUF) VS ITO BHAR UCH 9 FILING OF CONSOLIDATED PROFIT & LOSS ACCOUNT FOR TH E EARLIER YEAR AND IN ASSESSMENT YEAR UNDER APPEAL WOULD NOT PROVE THE CA SE OF THE ASSESSEE THAT THE ASSESSEE HAD BUSINESS INCOME IN ASSESSMENT YEAR 2002-03. FURTHER THE AO CANNOT TAKE COGNIZANCE OF SUCH FACT FOR ASSESSMENT YEAR 2002-03 BECAUSE NO PROCEEDING WAS PENDING BEFORE HI M FOR THAT ASSESSMENT YEAR. THEREFORE CONTENTION OF THE LEARN ED COUNSEL FOR THE ASSESSEE IS REJECTED THAT RECASTED ACCOUNTS SHOULD BE TAKEN INTO CONSIDERATION BY THE AUTHORITIES BELOW. IT MAY ALSO BE MENTIONED HERE THAT SECTION 32(2) OF THE IT ACT THROUGH WHICH THE ASSESSEE CLAIMED SET OFF OF THE UNABSORBED DEPRECIATION IN THE ASSESSMEN T YEAR UNDER APPEAL IS PART OF CHAPTER IV - D OF THE IT ACT WHICH IS CO NNECTED WITH COMPUTATION OF BUSINESS INCOME. SINCE THE ASSESSEE HAS NOT DISCLOSED ANY BUSINESS INCOME IN THE ASSESSMENT YEAR 2002-03 IN THE ORIGINAL RETURN THEREFORE THE PROVISIONS OF SECTION 32(2) OF THE IT ACT WOULD NOT APPLY TO SUCH ASSESSMENT YEAR. THEREFORE THERE IS NO QUESTION OF COMPUTATION OF BUSINESS INCOME OR CONSIDERATION OF ISSUE OF DEPRECIATION. AS NOTED ABOVE DEPRECIATION U/S 32(2 ) OF THE IT ACT IS ON THE FOOTING OF CURRENT DEPRECIATION IN THE ASSESSME NT OF THE ASSESSEE IN CASE FULL FACT IS NOT GIVEN; SAME COULD BE CARRIED FORWARD TO SUBSEQUENT YEAR AS UNABSORBED DEPRECIATION. SINCE IN THE ASSES SMENT YEAR 2002-03 NO BUSINESS INCOME WAS DECLARED AND THERE WAS NO CO MPUTATION OF BUSINESS INCOME THEREFORE THERE WAS NO QUESTION O F GIVING ANY EFFECT TO DEPRECIATION. WHEN THE ISSUE OF DEPRECIATION WAS NO T THERE IN THE ASSESSMENT YEAR 2002-03 THERE WAS NO QUESTION OF G IVING EFFECT TO THE DEPRECIATION U/S 32 ( 1 ) OF THE IT ACT. IN THE ABS ENCE OF ANY ASSESSMENT OF BUSINESS INCOME OR GIVING EFFECT TO DEPRECIATION THERE WAS NO QUESTION OF CONSIDERATION OF UNABSORBED DEPRECIATION IN THE SUBSEQUENT YEAR. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT EXPLANATION 5 TO SECTION 32 ( 1 ) OF THE IT ACT MAY BE APPLIED FOR G RANTING DEPRECIATION BECAUSE IT WAS APPLICABLE FROM 01-04-2002. EXPLANAT ION 5 TO SECTION 32 ( 1 ) OF THE IT ACT PROVIDES THAT FOR REMOVAL OF TH E DOUBT IT IS HEREBY ITA NO.831/AHD/2007 SHRI HASMUKHBHAI GANESHLAL PATEL (HUF) VS ITO BHAR UCH 10 DECLARED THAT THE PROVISIONS OF THIS SUB-SECTION SH ALL APPLY WHETHER OR NOT THE ASSESSEE HAS CLAIMED THE DEDUCTION IN RESPE CT OF DEPRECIATION IN COMPUTING HIS TOTAL INCOME. THE ABOVE PROVISION WAS INSERTED IN THE ACT WITH EFFECT FROM 01-04-2002 AND IS APPLICABLE FROM THE ASSESSMENT YEAR 2003-04. THEREFORE IT WOULD NOT APPLY TO THE ASSES SMENT YEAR 2002-03. FURTHER THE ASSESSEE HAS NOT MADE ANY CLAIM OF UNA BSORBED DEPRECIATION IN THE ORIGINAL RETURN FOR THE ASSESSM ENT YEAR 2003-04 UNDER APPEAL AND THE REVISED RETURN OF INCOME WAS A LSO INVALID AND THAT THE ISSUE OF DEPRECIATION DID NOT ARISE FROM THE RE TURN OF INCOME FOR ASSESSMENT YEAR 2002-03. THEREFORE THERE WAS NO QU ESTION OF GIVING SET OFF OF UNABSORBED DEPRECIATION IN THE ASSESSMENT YE AR UNDER APPEAL. THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. VS CIT ( 284 ITR 323) HELD THAT DEDUCTION CLAIMED AFTER RETURN FILED NO POWER IN ASSESSING OFFICER TO ENTERTAIN CLAIM MADE OTHER WIS E THAN BY WAY OF REVISED RETURN. MOREOVER NO APPEAL IS PENDING FOR ASSESSMENT YEAR 2002-03 IN THIS REGARD. THE DECISIONS CITED BY THE ASSESSEE BEFORE THE LEARNED CIT(A) HAVE ALREADY BEEN DISTINGUISHED BY T HE LEARNED CIT(A) ON WHICH THE LEARNED COUNSEL FOR THE ASSESSEE HAS NOT MADE ANY FURTHER SUBMISSIONS. THE LEARNED COUNSEL FOR THE ASSESSEE A LSO SUBMITTED THAT GROUND NO.2 OF THE APPEAL IS CONSEQUENTIAL IN NATUR E AND IS CONNECTED WITH UNABSORBED DEPRECIATION ON WHICH NO SEPARATE F INDING IS REQUIRED. CRUX OF FINDING WOULD BE IN ABSENCE OF COMPUTATION OF DEPRECIATION IN ASSESSMENT YEAR 2002-03 THERE IS NO QUESTION OF CL AIM OF UNABSORBED DEPRECIATION IN SUBSEQUENT ASSESSMENT YEAR 2003-04 UNDER APPEAL. 10. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF THE FINDINGS OF THE AUTHORITIES BELOW IT IS CLEAR THAT THE PROVISIONS OF SECTION 32(2) OF THE IT ACT WOULD NOT APPLY IN THE CASE OF THE ASSESSEE. THEREFORE THERE IS NO QUESTION OF GRANTING SET OFF OF UNABSORBED DEPRECIATION IN THE CASE OF THE ASSESSEE. WE CONFIR M THE FINDINGS OF THE ITA NO.831/AHD/2007 SHRI HASMUKHBHAI GANESHLAL PATEL (HUF) VS ITO BHAR UCH 11 AUTHORITIES BELOW AND DISMISS THE APPEAL OF THE ASS ESSEE ON THESE GROUNDS OF APPEAL. 11. ON GROUND NO.6 THE ASSESSEE CHALLENGED THE ADD ITION OF RS.30 000/- MADE U/S 68 OF THE IT ACT. THE AO NOTIC ED THAT THE ASSESSEE HAD TAKEN LOANS IN CASH FROM 12 PERSONS AMOUNTING T O RS.1 80 000/- AND WAS REQUESTED TO FURNISH PAN AND CONFIRMATION. BUT IN THE CASE OF TWO PERSONS NAMELY DINABEN PARESHKUMAR PATEL AND NA TUBHAI PRAGJIBHAI PATEL ONLY CONFIRMATIONS HAVE BEEN FILED AND NO OTHER DETAILS OF SOURCES OF INVESTMENT AND CREDITWORTHINESS IN A SUM OF RS.15 000/- EACH HAVE BEEN FILED. ADDITION WAS ACCORDINGLY MADE U/S 68 OF THE IT ACT. THE LEARNED CIT(A) ALSO CONFIRMED THE ADDITION BECA USE THE AMOUNTS HAVE BEEN GIVEN IN CASH AND THE DEPOSITORS ARE NOT ASSESSED TO TAX AND THAT NO SOURCE OF INCOME HAS BEEN ESTABLISHED. 12. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS FILED CONFIRMATION BEFORE THE AO AND NO FURTHER DETAIL WAS CALLED FOR. IT BEING THE PETTY AMOUNT THE ADDITION SHOULD NOT HAVE BEEN MADE. ON THE OTHER HAND LEARNED DR RELIED UPON THE ORDERS O F THE AUTHORITIES BELOW. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MA TERIALS AVAILABLE ON RECORD. IN ORDER TO PROVE THE GENUINENESS OF THE CREDITS U/S 68 OF THE IT ACT THE ASSESSEE SHALL HAVE TO PROVE IDENTITY O F THE CREDITORS THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION . THE ASSESSEE HAS ADMITTEDLY FILED ONLY CONFIRMATION OF THE CREDITORS BEFORE THE AO AND NO EVIDENCE OF THEIR CREDITWORTHINESS FOR GIVING LOANS HAVE BEEN ADMITTEDLY FILED. SINCE THE AMOUNTS HAVE BEEN GIVEN IN CASH AN D THE CREDITORS WERE NOT ASSESSED TO TAX THEREFORE THE AUTHORITIES BEL OW RIGHTLY INFERRED THAT THE TRANSACTION IS NOT GENUINE. IN THE ABSENCE OF A NY EVIDENCE OF THEIR SOURCE OF INCOME TO GIVE LOAN AND IN THE ABSENCE OF ANY EVIDENCE OF THE CREDITWORTHINESS OF THE CREDITORS THE AUTHORITIES BELOW WERE JUSTIFIED IN ITA NO.831/AHD/2007 SHRI HASMUKHBHAI GANESHLAL PATEL (HUF) VS ITO BHAR UCH 12 MAKING THE ADDITION. MERE FILING OF CONFIRMATION WO ULD NOT PROVE GENUINE CREDIT. THE ASSESSEE HAS THUS FAILED TO DISCHARGE T HE ONUS UPON HIM TO ESTABLISH GENUINE CREDIT. WE ACCORDINGLY CONFIRM T HE FINDINGS OF THE AUTHORITIES BELOW AND DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. 14. NO OTHER POINT IS ARGUED OR PRESSED. 15. AS A RESULT THE APPEAL OF THE ASSESSEE IS DISM ISSED. ORDER PRONOUNCED ON 30-07-2010 SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 30-07-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR ITAT AHMEDABAD