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2023 (4) TMI 857 - HC - Income TaxRevision u/s 263 - tribunal justification in sustaining the order of CIT - Whether tribunal was justified in sustaining the order of the CIT when the assessing officer completed the assessment after making necessary enquiries and verifications? - Whether there were materials before the appellate tribunal to believe that the view taken by the assessing officer is unsustainable in law and is erroneous and prejudicial to the interest of the revenue? - HELD THAT - Question nos. (i), (ii) and (iii) are covered by the Full Bench order 2022 (10) TMI 851 - KERALA HIGH COURT Hence, the questions are answered in favour of the assessee and against the Revenue for statistical purposes and the matter is remitted to the Assessing Officer for assessment afresh by keeping in view the order of the Full Bench. Setoff of loss sustained by the rubber sheet factory - whether was in the course of a business activity and ought to have been set off against the business income without applying the provisions of Rule 7A? - HELD THAT - By following the reasoning, consideration and remand of question No.(iii) in 2022 (10) TMI 851 - KERALA HIGH COURT question No.(iv) in the instant appeal is answered in favour of the assessee and against the Revenue for statistical purposes and the matter is remitted to the Assessing Officer for consideration and disposal afresh.
Issues Involved:
1. Appeal arising from the order dated 22.01.2013 in ITA No.137/Coch/2012 before the Income Tax Appellate Tribunal, Cochin Bench for Assessment Year 2007-08. 2. Substantial questions of law raised by the assessee related to the justification of sustaining the Commissioner of Income Tax's order without considering the merits of the case, completion of assessment by the assessing officer, sustainability of the assessing officer's view, and the set off of loss against business income without applying Rule 7A. Analysis: 1. The appellant, Rehabilitation Plantation Ltd, challenged the order of the Commissioner of Income Tax, Aayakar Bhavan, Thiruvananthapuram, before the High Court of Kerala. The appeal stemmed from a decision made by the Income Tax Appellate Tribunal, Cochin Bench, for the Assessment Year 2007-08. 2. The substantial questions of law raised by the assessee revolved around the appellate tribunal's justification in upholding the Commissioner's order without assessing the case's merits. Additionally, the assessing officer's completion of the assessment after necessary inquiries and verifications was questioned. The presence of materials before the appellate tribunal to challenge the assessing officer's view as unsustainable in law and prejudicial to revenue was also a significant issue. Furthermore, the appellant argued for the set off of the loss incurred by the rubber sheet factory against business income without applying Rule 7A. 3. The counsel for both parties acknowledged that certain questions were addressed in a Full Bench order dated 01.08.2022 in I.T.A No.201/2013. Consequently, questions (i), (ii), and (iii) were resolved in favor of the assessee and against the Revenue for statistical purposes. The matter was remitted to the Assessing Officer for a fresh assessment in line with the Full Bench's order. 4. Regarding Substantial Question No. (iv), the court referred to the reasoning, consideration, and remand of question No. (iii) in I.T.A No. 37/2018. Consequently, Question No. (iv) in the current appeal was also decided in favor of the assessee and against the Revenue for statistical purposes. The matter was remitted to the Assessing Officer for further consideration and disposal. 5. In conclusion, the appeal was allowed, and no order was issued regarding costs. The judgment provided clarity on the substantial questions of law raised by the appellant and directed a fresh assessment by the Assessing Officer in accordance with the court's findings and previous decisions. This detailed analysis of the judgment highlights the key issues, arguments, and outcomes of the case, providing a comprehensive understanding of the legal proceedings and decisions made by the High Court of Kerala.
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