IN INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER I.T.A. No.197/Coch/2016 Assessment Year : 2007-08 Shri Chacko Antony, Vs. Assistant Commissioner of Hotel Blue Star, Income-tax, Circle-1, Thiruvalla, Opp. Fire Station, Kottayam. Changanacherry. [PAN: ABNPA 1946R] (Assessee-Appellant) (Revenue-Respondent) Assessee by Shri Thomas Cherian, FCA Revenue by Shri A. Dhanaraj, Sr.DR Date of hearing 21/09/2016 Date of pronouncement 22//09/2016 ORDER Per B.P. JAIN, ACCOUNTANT MEMBER: This appeal of assessee arises from order of Ld. CIT(A), Kottayam dated 01/03/2016 for assessment year 2007-08. 2. assessee has raised following grounds of appeal:- 1. order of Commissioner of Income Tax(Appeals), Kottayam is erroneous not only in law, but also on facts and circumstances of case in so far as it is prejudicial to interest of appellant. 2. Commissioner of Income Tax(Appeals) erred in dismissing appeal, in spite of facts, various case laws and submissions filed by appellant, confirming findings of Assessing Officer which is contradictory to law 2 I.T.A. No.197/Coch/2016 and facts of case and there for disallowance of set off of carry forward Business loss of Rs.6,76,410/- is to be cancelled. 3. As per section 72 of Income Tax Act 1961, (1) Where for any assessment year, net result of computation under head Profit and gains of business or profession is loss to assessee, not being loss sustained in speculation business, and such loss cannot be or is not wholly set off against income under any head of income in accordance with provisions of section 71, so much of los as has not been so set off or, where he has no income under any other head, whole loss shall, subject to other provisions of this Chapter, be carried forward to following assessment year, and- (i) it shall be set off against profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year; (ii) if loss cannot be wholly so set off, amount of loss not so set off shall be carried forward to following assessment year and so on (2) Where any allowance or part thereof is, under sub-section(2) of section 32 or sub-section (4) of section 35, to be carried forward, effect shall first be given to provisions of this section. (3) No loss shall be carried forward under this section for more than eight assessment years immediately succeeding assessment year for which loss was first computed. Here all conditions of section 72 has been satisfied in my case. 4. Commissioner of Income Tax(Appeals) is also wrong in confirming view of Assessing Officer, that assets are not put to use. In view of above and other grounds which may be forwarded at time of hearing of appeal, this appeal may be allowed and justice rendered. 3. brief facts of case are that assessment in present case was made u/s. 143(3) of Act on 28/12/2009 determining total income at Rs.8,18,280/- and agricultural income at Rs.42,300/-raising demand of Rs.2,67,034/-. assessee filed application for rectification on 25/02/2010 3 I.T.A. No.197/Coch/2016 stating that assessment u/s. 143(3) for assessment year 2007-08 was completed without considering carry forward business loss for assessment year 2003-04. In fact, Assessing Officer did not adjust carry forward loss. Aggrieved by this action of Assessing Officer, assessee filed appeal before Ld. CIT(A). However, Ld. CIT(A) confirmed action of Assessing Officer. 4. I have heard rival contentions and perused facts of case. assessee filed loss return for assessment year 2003-04 on 28/11/2003 on or before due date of filing of return. This fact has not been controverted by Ld. DR with any documentary evidence. For assessment year 2003-04, assessee claimed business loss of Rs.12,15,200/- and unabsorbed depreciation of Rs.1,64,794/-. assessee did not set off these against income for assessment years 2004-05, 2005-06 and 2006-07 though it was having positive income in respective years. For assessment year 2007-08, assessee claimed loss. issue in present appeal is directly covered by decision of ITAT, Jaipur Bench in case of M/s. Rajasthan Explosives Ltd. vs. JCIT reported in 2016 (3) TMI 1013 ITAT Jaipur where it has been held as under: Disallowance of carry forward of loss Held that Since no claim of set off of los is made by assessee in this year action of Assessing Officer in rejecting to allow carry forwarded is not tenable as it preempts future quasi- judicial powers of Assessing Officer who has to actually set off of loss if and when there are profits. Therefore, remarks/findings of ld. Assessing Officer denying claim of carryover of earlier losses and unabsorbed depreciation 4 I.T.A. No.197/Coch/2016 are expunged. legality of claim of set off will be considered by Assessing Officer who will deal with aspect of set off. See Manmohan Das (1965) (11) TMI 33 SUPREME Court). Thus grounds of assessee to this extent are allowed. 5. In circumstances and facts of case, set off of business loss and that of unabsorbed depreciation has to be allowed by Assessing Officer and Assessing Officer is directed accordingly. Thus all grounds of appeal of assessee are allowed. 6. In result, appeal of assessee in I.T.A. No. 197/Coch/2016 is allowed. Pronounced in open court on 22-09-2016 sd/- (B.P. JAIN) ACCOUNTANT MEMBER Place: Kochi Dated: 22nd September, 2016 GJ Copy to: 1. Shri Chacko Antony, Hotel Blue Star, Opp. Fire Station, Changanacherry. 2. Assistant Commissioner of Income-tax, Circle-1, Thiruvalla, Kottayam. 3. Commissioner of Income-tax(Appeals),Kottayam. 4. Principal Commissioner of Income-tax, Kottayam. 5. D.R., I.T.A.T., Cochin Bench, Cochin. 6. Guard File. By Order (ASSISTANT REGISTRAR) I.T.A.T., Cochin 5 I.T.A. No.197/Coch/2016 Chacko Antony v. Assistant Commissioner of Income-tax, Circle-1, Kottayam