2012 (10) TMI 1196 - AT - Income Tax

Summary

Issues involved:
The judgment involves issues related to the computation of total income, carry forward of deficit, interpretation of provisions of sec. 11, and the authority of the Assessing Officer to entertain claims made by the assessee.

Computation of Total Income:
The appeal was against the order passed by the CIT(A)-1, Mumbai, where the Assessing Officer raised grounds regarding the computation of total income by the assessee. The AO contended that the assessee had filed a return with a total income of Rs. Nil and did not claim any deficit. However, the CIT(A) erred in not considering this fact.

Interpretation of Provisions u/s 11:
The issue of carrying forward a deficit of Rs. 2.78 Crores by the assessee trust arose due to excess expenditure incurred. The AO rejected the claim for carrying forward the deficit, stating there is no provision in the Act for such carry forward where expenditure exceeds income. The CIT(A) directed the AO to carry forward the deficit, but the AO disagreed, citing sec. 11 provisions.

Authority of Assessing Officer:
The AO rejected the claim made by the assessee trust for carrying forward the deficit. The FAA allowed the appeal, mentioning that the issue was decided in favor of the assessee by the jurisdictional High Court and the Tribunal. The ITAT Mumbai also referred to a previous order where the issue was decided in favor of the assessee.

Decision:
The ITAT Mumbai found that the assessee was entitled to carry forward the deficit based on the jurisdictional High Court's decision. However, a calculation error was identified, and the correct amount of carry-forward deficit needed to be determined. The matter was remanded back to the AO for this purpose, and the assessee was directed to provide the necessary details.

Conclusion:
The appeal filed by the AO was partly allowed for statistical purposes, and the order was pronounced in open court on 23rd October 2012.