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2015 (8) TMI 128 - AT - Income TaxCredit of brought forward losses - whether CIT(A)erred in not allowing the additional ground of the appellant for giving credit of brought forward losses? - Held that - As for assessment year 2004-05, 2006-07 and 2007-08, the return of income was filed by the assessee within due date prescribed u/s 139(1) and the assessment was completed by the Assessing Officer at a loss of ₹ 16.14 lac, ₹ 11.56 lac and ₹ 159.56 lac respectively and these losses were not set off in assessment year 2008-09 and therefore, losses of these are year are eligible for set off in the present year if there was no set off in A.Y. 2005 06 of the loss for A.Y. 2004 05. The assessment order for assessment year 2005-06 is not available and therefore, this is necessary to find out as to what was the assessed income in that year although the return of income was filed within the due date for this year also and if it is found that there was any loss assessed in that year, such loss should also be eligible for set off in the present year. We we feel that the order of CIT(A) is not sustainable but at the same time, the issue has to go back to the file of the Assessing Officer for fresh decision after finding out the outcome of the assessment in assessment year 2005-06. - Decided in favour of assessee for statistical purposes. Payment of salary by transfer to UP Cooperative Union - deputed persons / supervisors - Non deduction of TDS - Held that - From the Para from the order of CIT(A), we find that a clear finding has been given by him that the payment of salary by transfer to UP Cooperative Union of ₹ 1,75,000/- each in the case of 3 supervisors is without deduction of TDS and so is the case with other supervisors to whom part of the salary is disbursed by the assessee and part is transferred to UP Cooperative Union for statutory dues. This finding is also given that there is no evidence of any claim of deduction under section 80C of the Act which could have reduced the income to below taxable limit. Hence, it is seen that the TDS was deductible and since it was not done by the assessee, the disallowance made by Assessing Officer and confirmed by CIT(A) is proper.- Decided against assessee. Disallowance of professional charges paid to Shri R.K. Nigam - Non deduction of TDS - Held that - From the the order of CIT(A), we find that the claim of the assessee is regarding payment of ₹ 94,234/- including the amount of ₹ 36,233/- for reimbursement of expenses. This is by now a settled position of law that if the bill raised for reimbursement of expenses is separate and the bill for service charges is raised separately then there may be case of no deduction of TDS from the reimbursement but the assessee could not produce details that the bills for service charges was raised separately and the claim for reimbursement of expenses was made separately. In the absence of separate bill, composite amount has to be considered for TDS purposes and under these facts, we do not find any reason to interfere in the order of learned CIT(A).- Decided against assessee. Computing the taxable income - Whether profit was inclusive of reversal of NPAs provisions? - Held that - The matter should go to the file of the Assessing Officer for fresh decision after examining this aspect as to whether the write back of the provision in the present year is out of provision of which year and whether the provision in the respective year was allowed or not and if it is found that the provision in the year of creation of provision was disallowed then the reversal of the provision in the present year should not be taxed and this should be excluded from the profit as per profit & loss account. - Decided in favour of assessee for statistical purposes.
Issues Involved:
1. Credit for brought forward losses. 2. Addition of Rs. 1,60,000. 3. Addition of Rs. 4,16,137. 4. Addition of Rs. 94,234. 5. Inclusion of reversal of provisions in taxable income. Detailed Analysis: 1. Credit for Brought Forward Losses: The assessee contested the CIT(A)'s decision to not allow the credit for brought forward losses. The CIT(A) had rejected the claim based on the fact that the return for the assessment year 2008-09 was filed late, thus disqualifying the losses from being carried forward as per Section 80 and Section 139(3) of the Income Tax Act. The Tribunal found that the returns for assessment years 2004-05, 2005-06, 2006-07, and 2007-08 were filed within the due date and the losses were determined by the Assessing Officer. The Tribunal referred to the Supreme Court judgment in CIT vs. Manmohan Das (Deceased) and concluded that the losses from these years should be eligible for set off in the present year. The matter was remanded back to the Assessing Officer to verify the assessment outcome for the year 2005-06 and to allow the set-off of losses accordingly. 2. Addition of Rs. 1,60,000: This ground was not pressed by the assessee and was thus rejected as not pressed. 3. Addition of Rs. 4,16,137: The assessee challenged the addition of Rs. 4,16,137, arguing that the payments were made after deducting TDS wherever applicable. The CIT(A) had found that part of the salary payments to supervisors was made without TDS deduction, and there was no evidence of any claim of deduction under Section 80C that could have reduced the income below the taxable limit. The Tribunal upheld the CIT(A)'s decision, noting that the assessee failed to demonstrate that the deputed persons had paid tax on the salaries received, thereby confirming the disallowance under Section 40(a)(ia). 4. Addition of Rs. 94,234: The assessee contended that the amount included Rs. 36,233 for reimbursement of expenses, on which TDS was not deductible. The CIT(A) had concluded that reimbursement of expenses is included in the payment on which TDS is to be deducted. The Tribunal agreed with the CIT(A), stating that in the absence of separate bills for reimbursement and service charges, the composite amount must be considered for TDS purposes, thus upholding the disallowance under Section 40(a)(ia). 5. Inclusion of Reversal of Provisions in Taxable Income: The assessee argued that the profit of Rs. 2,93,87,633 included a reversal of provisions amounting to Rs. 2,83,63,000, which had already been taxed in the assessment year 2004-05. The Tribunal admitted this additional ground, noting that it is a legal claim that can be raised at any stage. The Tribunal referred the matter back to the Assessing Officer to verify whether the reversal of the provision in the present year was from the provision made in the assessment year 2004-05 and whether it was disallowed in that year. If the provision was disallowed in the year of creation, the reversal should not be taxed in the present year. The matter was remanded for fresh decision with appropriate opportunity for the assessee to be heard. Conclusion: The appeal was partly allowed for statistical purposes, with directions for fresh examination and decision on the issues of brought forward losses and the inclusion of reversal of provisions in taxable income. The additions of Rs. 1,60,000, Rs. 4,16,137, and Rs. 94,234 were upheld.
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