M/s Haryana State Small Industries & Export Corp. Ltd.,, Chandigarh v. Addl. CIT, Panchkula

ITA 898/CHANDI/2009 | 2006-2007
Pronouncement Date: 28-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 89821514 RSA 2009
Assessee PAN AAACH4689P
Bench Chandigarh
Appeal Number ITA 898/CHANDI/2009
Duration Of Justice 1 year(s) 7 month(s) 10 day(s)
Appellant M/s Haryana State Small Industries & Export Corp. Ltd.,, Chandigarh
Respondent Addl. CIT, Panchkula
Appeal Type Income Tax Appeal
Pronouncement Date 28-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 28-07-2011
Date Of Final Hearing 19-07-2011
Next Hearing Date 19-07-2011
Assessment Year 2006-2007
Appeal Filed On 18-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI D.K.SRIVASTAVA ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA JUDICIAL MEMBER ITA NO. 898/CHD/2009 ASSESSMENT YEAR: 2006-07 M/S HARYANA STATE SMALL INDUSTRIES & VS. THE ADDL CIT EXPORT CORPORATION LIMITED PANCHKULA RANGE CHANDIGARH PANCHKULA PAN NO. AAACH4689P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SINGH RESPONDENT BY: SHRI AJAY SHARMA ORDER PER SUSHMA CHOWLA JM THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) PANCHKULA RELATING TO ASSESSMENT YEAR 2006-07 AGAIN ST THE ORDER PASSED UNDER SECTION 2006-07 OF THE I.T. ACT 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE DISALLOWANCE OF EXPENSES CLAIMED AGAINST BUSINESS INCOME EARNED WHICH ARE ALLOWABLE AS SUCH THE ACTIO N OF THE CIT(A) IS UNJUSTIFIED. 2. THE LD. CIT(A) HAS FURTHER ERRED IN LAW AS WELL AS ON FACTS IN TREATING INCOME OF ASSESSEE TO BE INCOME F ROM OTHER SOURCES AND NOT BUSINESS INCOME AS DECLARED WHICH IS ARBITRARY AND UNJUSTIFIED. 3. THAT THE LD. CIT(A) HAS FURTHER ERRED IN NOT ALL OWING THE BENEFIT OF B/F LOSSES TO BE SET OFF AGAINST THE INCOME DECLARED AND SO ASSESSED. 2 4. THAT THE LD. CIT(A) HAS FURTHER ERRED IN NOT TR EATING THE CURRENT YEAR LOSS AS BUSINESS LOSS WHICH IS ARBITRARY AND UNJUSTIFIED. 5. THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDI NG THE DISALLOWANCE OF THE PRIOR PERIOD EXPENDITURE OF RS. 1 12 006/- WHICH IS ARBITRARY AND UNJUSTIFIED. 6. THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDI NG THE CHARGING OF INTEREST UNDER SECTION 234 WHICH IS NOT CHARGEABLE IN THE FACTS OF THE CASE. 3. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT THE ISSUE ARISING IN THE PRESENT APPEAL STANDS COVERED BY THE ORDER OF THE T RIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 777/CHD/2008 RELATING TO ASSESS MENT YEAR 2005-06 (ORDER DATED 10.12.2010). THE LD. DR PLACED RELIANC E ON THE ORDER OF CIT(A). 4. THE ISSUE RAISED IN THE GROUND NOS. 1 & 2 IS AGA INST THE ACCESSIBILITY OF THE INTEREST INCOME. THE CLAIM OF THE ASSESSEE IS THAT THE SAID INTEREST INCOME IS TO BE ASSESSED AS BUSINESS INCOME WHEREAS THE AUTHORITIES BELOW HAD ASSESSED THE SAME AS INCOME F ROM OTHER SOURCES. THE PLEA OF THE ASSESSEE IS THAT THE EXPENDITURE RE LATING TO EARNING OF SUCH INCOME IS FURTHER TO BE ALLOWED AS A DEDUCTION. T HE ISSUE IN GROUND NO. 3 RAISED BY THE ASSESSEE IS AGAINST THE NON-ALLOWAN CE OF BENEFIT OF BROUGHT FORWARD LOSSES TO BE SET OFF AGAINST THE INCOME DEC LARED AND ASSESSED. THE ISSUE IN GROUND NO.4 IS AGAINST THE ADJUSTMENT OF THE CURRENT YEAR LOSSES. 5. WE FIND THAT SIMILAR ISSUE AROSE BEFORE THE TRIB UNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEAR 2005-06 AND VI DE ORDER DATED 3 10.12.2010 THE TRIBUNAL IN TURN FOLLOWING THE EAR LIER RATIO LAID DOWN IN ASSESSMENT YEARS 2006-07 AND 2005-06 IN THE CASE OF SISTER CONCERN OF THE ASSESSEE IT WAS OBSERVED BY THE TRIBUNAL AS UNDER: - 6. WE ON PERUSAL OF RECORD FIND THAT THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 919/CHD/2009 RELATIN G TO ASSESSMENT YEAR 2006-07 VIDE ORDER DATED 30.10.2009 IN TURN FOLLOWING THE ORDER OF THE TRIBUNAL IN ITA NO. 1042/CHD/2008 RELATING TO ASSESSMENT YEAR 2005-06 H AD OBSERVED VIDE PARA 5 THAT THE CURRENT LOSSES WERE I GNORED BY THE ASSESSEE ITSELF AND THE ONLY ISSUE BEFORE THE T RIBUNAL WAS IN RESPECT OF ADJUSTMENT OF BROUGHT FORWARD LOSSES. THE TRIBUNAL ALSO NOTED THE ASSESSEE TO HAVE EARNED INC OME ON FDRS AND THE CARRIED FORWARD BUSINESS LOSSES WERE N OT ALLOWED TO BE SET OFF AGAINST INCOME FROM INTEREST. THE EXPENSES INCURRED BEING NOT RELATABLE TO INTEREST I NCOME WERE ALSO NOT ALLOWED BY THE ASSESSING OFFICER. T HE TRIBUNAL VIDE PARA 7 HELD AS UNDER:- IN THE LIGHT OF THE RATIO LAID DOWN BY THE TRIBUNAL RELATING TO ASSESSMENT YEAR 2005-06 WE REMAND THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO ALLOW THE RELIEF OF SET OFF OF CARRIED FORWARDED LOSSES AGAINST BUSINESS INCOME ASSESSED IN THE HANDS OF TE ASSESSEE. THE A IS ALSO DIRECTED TO VERIFY THE NATURE OF EXPENDITURE AND ITS ALLOW ABILITY AGAINST THE INCOME EARNED BY THE ASSESSEE UNDER THE HEAD INCOME FROM BUSINESS OR INCOME FROM OTHER SOURCES AS THE CASE MAY BE. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THUS ALLOWED FOR STATISTICAL PURPOSES. 6. ADMITTEDLY THE ISSUE ARISING IN THE PRESENT APP EAL BEFORE US IS IDENTICAL TO THE ISSUE RAISED IN THE EARLIER YEARS AND FOLLOWING THE REASONING IN THE SAID ORDER WE REMIT THE ISSUE TO THE FILE OF ASSESSING OFFICER TO DECIDE THE SAME IN LINE WITH THE DIRECTI ON OF THE TRIBUNAL VIDE PARA 7 IN ITA NO. 919/CHD/2009. WE FIND THAT AN ER ROR HAD CREPT IN THE ORDER OF THE TRIBUNAL DATED 10.12.2010 WHEREIN A RE FERENCE WAS MADE TO ITA NO. 919/CHD/2009 RELATING TO ASSESSMENT YEAR 20 06-07 AS BEING ASSESSEES OWN CASE THOUGH THE SAME RELATES TO M/S HARYANA STATE HANDLOOM AND HANDICRAFT CORPORATION LTD PANCHKULA. REMITTING THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER WE HOL D THAT THE INTEREST 4 INCOME EARNED BY THE ASSESSEE IS TO BE ASSESSED AS INCOME FROM OTHER SOURCES AND THE EXPENDITURE INCURRED IN RELATION TO THE EARNING OF SAID INCOME IS TO BE ALLOWED AS A DEDUCTION. THE ISSUE RAISED BY THE ASSESSEE OF ASSESSIBILITY OF SAID INCOME AS BUSINESS INCOME VIDE GROUND NO.1 IS THUS DISMISSED GROUND NO.2 RAISED IS ALLOWED FOR S TATISTICAL PURPOSES. IN RESPECT OF THE ISSUE FOR ALLOWING THE BENEFIT OF BR OUGHT FORWARD LOSSES WE FIND THAT THE ISSUE STAND COVERED BY THE ORDER OF T HE TRIBUNAL AND THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE CLAIM O F THE ASSESSEE AND DECIDE THE SAME IN ACCORDANCE WITH LAW. THUS GROUN D NO.3 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 7. THE LAST ISSUE AGAINST THE ADJUSTMENT OF THE CU RRENT YEAR LOSSES DOES NOT ARISE IN VIEW OF THE SIMILAR ISSUE BEING I GNORED BY THE ASSESSEE IN THE EARLIER YEARS AND ALSO IN VIEW OF THE ASSESSMEN T OF THE INCOME AS INCOME FROM OTHER SOURCES. THUS GROUND NO.4 IS DIS MISSED. 8. THE GROUND NO.5 RAISED BY THE ASSESSEE WAS NOT P RESSED BY THE LD. AR FOR THE ASSESSEE AND HENCE THE SAME IS DISMISSED AS NOT PRESSED. 9. THE ISSUE IN GROUND NO.6 IS OF CHARGEABILITY OF INTEREST U/S 234 IS CONSEQUENTIAL AND HENCE GROUND NO.6 IS ALSO DISMISS ED. 10. IN THE RESULT APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF JULY 2011. SD/- SD- (D.K.SRIVASTAVA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : JULY 2011 RKK 5 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT CHANDIGARH