2015 (3) TMI 1297 - AT - Income Tax

Eligibility to exemption u/s 11 - eligible to benefits of set off of carried forward losses - Held that - As decided in assessee s own case for the assessment year 2008-09 we find that assessee deserves to succeed in this ground. We have seem various assessment orders for earlier years, copies of which are placed on record and found that the respective assessing officers had allowed the net deficit to be carried forward in the respective assessment order. Therefore, there is no reason in not allowing the benefit of carry forward losses/deficit. Accordingly, we direct the AO to allow the benefit of quantified carry forward losses to the assessee against the income of the assessee. For the sake of clarification, for the year under consideration there was a positive income and, therefore, assessee has filed its return showing the income of the year, exemption under section 11 of the Act has also been claimed. If the carry forward losses are allowed to be set off then the income will become of negative figure and, therefore, exemption under section 11 cannot be allowed. - Decided in favour of assessee.

Summary

Issues:
1. Revenue's appeal against CIT(A)'s order for assessment year 2009-10.
2. Revenue's ground on allowing benefit of carried forward losses to the assessee.
3. Assessee's cross objections regarding denial of exemption u/s 11, treatment of various receipts as income, disallowance of depreciation and expenses.
4. CIT(A) allowing set off of carried forward losses based on ITAT judgment for assessment year 2008-09.
5. ITAT's decision in assessee's own case for assessment year 2008-09 regarding carry forward losses and exemption under section 11.

Analysis:
1. The appeal was filed by the Revenue against the CIT(A)'s order for the assessment year 2009-10. The Revenue raised a single ground related to the allowance of quantified carried forward losses to the assessee against their income.
2. The assessee, in its cross objections, challenged the denial of exemption u/s 11, treatment of various receipts as income, disallowance of depreciation, and expenses. The CIT(A) passed the order based on a similar issue in the assessment year 2008-09, allowing set off of carried forward losses to the assessee.
3. In the ITAT's judgment for the assessment year 2008-09 in the assessee's own case, it was held that the assessee deserved to succeed in the ground related to carry forward losses. The ITAT directed the AO to allow the benefit of quantified carry forward losses to the assessee against their income.
4. The ITAT dismissed the Revenue's appeal and the assessee's cross objections became infructuous as a result. The decision was based on the previous judgment regarding the eligibility of the assessee for the benefits of set off of carried forward losses.
5. The ITAT upheld the CIT(A)'s order, finding no infirmity in it, and dismissed the Revenue's appeal. The grounds of the assessee were also considered infructuous following the dismissal of the Revenue's appeal.

This detailed analysis highlights the key issues, arguments, and decisions made in the legal judgment by the ITAT Jaipur.