KALPANA LOK LTD v. INCOME TAX OFFICER
[Citation -1984-LL-0514-2]

Citation 1984-LL-0514-2
Appellant Name KALPANA LOK LTD
Respondent Name INCOME TAX OFFICER
Court ITAT
Relevant Act Income-tax
Date of Order 14/05/1984
Assessment Year 1974-75, 1975-76
Judgment View Judgment
Keyword Tags profits and gains of business or profession • reassessment proceedings • income chargeable to tax • private limited company • depreciation allowance • determination of loss • excess depreciation • statutory period
Bot Summary: B.R. ADWALPALKAR, A.M. The Only point for consideration in theses two appeals filed by the assessee is whether the assessee Company was entitled to get its loss determined and carried forward notwithstanding the fact that such loss was declared for the first time in the returns filed in response to notice under s. 148 r/w s. 147 of the IT Act,1961. In the returns so filed on 15th Feb., 1979, the assessee company declared a loss of Rs. 35,110 for the asst. Counsel for the assessee, submitted at the outset that the assessee company could not file its returns in time because its books of account were seized by the IT Department, and were not released so as to enable the assessee to file the returns. Shri R.N. Vaze, the Departmental representative on the other hand, submitted that the returns filed by the assessee for the asst. Has to furnish within the time allowed under s. 139 or within such further time assessee the ITO may, in his discretion allow on an application made by the as. The assessee had obviously not filed the returns within any of the aforesaid time limits was not entitled to the determination and carry forward of losses which were admittedly claimed for the first time in returns filed in response to notice under s. 148 r/w. In the result, the assessee s appeals are dismissed.


B.R. ADWALPALKAR, A.M. Only point for consideration in theses two appeals filed by assessee is whether assessee Company was entitled to get its loss determined and carried forward notwithstanding fact that such loss was declared for first time in returns filed in response to notice under s. 148 r/w s. 147 (a) of IT Act,1961. assessee is private limited company carrying on business of production of cinematographic feature films. For asst. yrs. 1974-75 and 1975 -76 assessee company did not file its returns voluntarily but in response to notice issued to it by ITO under s. 148 r/w s. 147 (a) of IT Act. In returns so filed on 15th Feb., 1979, assessee company declared loss of Rs. 35,110 for asst. yr. 1974-75 and Rs. 53,340 for asst. yr. 1975-76 . T h e ITO, however, found that assessee-company who had filed balance sheets and profits and loss accounts for each of assessment years had declared only royalty receipts against which it had claimed expenses, these ITO considered excessive. He observed that beside assessee had not shown any receipt on account of picture Neel Kamal which was released earlier. He therefore, held that assessee s accounts were not verifiable . He also pointed out that since assessee had not filed returns as required within time stipulated under provisions of s. 139 (3) of IT Act, loss returned by assessee cannot be treaded as loss. He, therefore, determined total income of assessee for two assessment years at Nil and finalised two assessment proceedings accordingly. On appeal by assessee, CIT (A) rejected assessee s contention that ITO ought to have computed loss for each of years. He pointed out that, since assessee had not filed return suo motu in time but in response to notice under s. 148, assessee cannot claim as of right, any benefit which it could not have held if assessment were not so reopened. (sic) He added that it would be open to ITO to drop such assessments and that in law, it will be deemed that ITO has dropped relevant assessment proceedings in question in assessee s case. In this view, he dismissed assessee s appeals. Hence present appeals by assessee to Tribunal. Before us Shri D.D. Shah, ld. Counsel for assessee, submitted at outset that assessee company could not file its returns in time because its books of account were seized by IT Department, and were not released so as to enable assessee to file returns. He contended that, in any case , t h e returns filed by assessee in response to notice under s. 148 r/ws.147(a) were returns under s. 139 (2) and as such entitled assessee to determination of its business losses and carry forward thereof in accordance with law .In support of proposition . Shri Shah cited decision of Madras High Court in case of CIT vs. Standard Motor Products of India Ltd. (1983) 35 CTR (Mad) 107: (1983) 142 ITR 877 (Mad). He also referred to decision of Calcutta High Court in case of Presidency & Medical Centre (P) Ltd vs. CIT (1977) 108 ITR 838 (Cal). Shri R.N. Vaze, Departmental representative on other hand, submitted that returns filed by assessee for asst. yrs. 1974-75 and 1975-76 were neither under s. 139 (1) nor under s. 139(2) nor under s. 139 (4) of Act, since each of said section has laid down statutory period within which return has to be filed. As regard judicial decisions relied upon on behalf of assessee Departmental representative, submitted that these were not case in point . We have carefully considered rival submission vis -a -vis facts of case and relevant case law. It is undisputed fact in present case that assessee did not file any return for asst. yrs.1974-75 and 1975-76 suo motu within time limit prescribed under s. 139 (1) and 139(4). There was apparently no notice issued to assessee under s. 139(2) within relevant financial years. clear provisions of s. 139(3) of IT Act, 1961, lay down that if any person who has not been served with notice under sub-s (2) of s.139, has sustained loss in any previous year under head profits and gains of business or profession etc., and claims that loss or any part thereof should be carried forward u/ subs-s (1) of s.72 or sub-s (2) of s.73 or subs-s (1) of s. 74 etc., has to furnish within time allowed under s. 139 (1) or within such further time assessee ITO may, in his discretion allow on application made by as. even person who has not furnished return within time allowed to him under s. 139(1) or 139(2) can furnish return before assessment is made, but then returns had to be filed before expiry of two years from end of assessment years in question. assessee had obviously not filed returns within any of aforesaid time limits was not entitled to determination and "carry forward" of losses which were admittedly claimed for first time in returns filed in response to notice under s. 148 r/w. s. 147(a). In this respect, decision of Madras High Court in case of Standard Motor Products India Ltd., (Supra) does not assist assessee - company s contention, for in that case, questions were whether in reassessment proceedings ITO can assess entire income including items falling under s. 147(b) and also whether withdrawal of excess depreciation in respect of machinery is permissible in reassessment proceedings. Similarly, reliance by assessee s counsel on decision of Calcutta High Court in case of Presidency & Medical centre (p) Ltd. (Supra) is evidently misplaced for, in that case, return was filed by assessee within time specified under s. 139 (4) of IT Act 1961. As already explained above, this is obviously not case of present assessee. We also agree with CIT (A) that in reassessment proceedings under s. 147(a), assessee cannot get benefit which he has missed by not complying with t h e statutory provisions in that behalf . we may add that reassessment proceedings under s. 147 of IT Act are evidently intended for charging to tax income chargeable to tax which has escaped assessment in sense that it has been under assessed, assessed at too lower rate or has been made subject of excessive relief under Act or excessive loss or depreciation allowance has been computed. said provisions are certainly not intended to grant relief to assessee by way of determination of loss and carry forward thereof. In this view of matter, we uphold decision of CIT (A) for both assessment years. In result, assessee s appeals are dismissed. *** KALPANA LOK LTD v. INCOME TAX OFFICER
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