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TMI Blog2023 (11) TMI 1284X X X X Extracts X X X X X X X X Extracts X X X X ..... erification and for calculation we remand back the issue to the file of the AO for allowing the carry forwarded loss of the assessee as per the law. Therefore, the ground 5 is duly remanded back to the file of the ld. AO for verification of the loss claimed by the assessee and the eligible carry forwarded loss should be allowed as per the law. Reasonable opportunity should be allowed to assessee in set aside proceeding. - Dr. M. L. Meena, Accountant Member And Sh. Anikesh Banerjee, Judicial Member For the Appellant : None (Written submission). For the Respondent : Sh.Ravinder Mittal, Sr. DR. ORDER PER: ANIKESH BANERJEE, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income (Appeals)-5, Ludhiana, (in brevity the CIT(A) ) order passed u/s 250(6) of the Income-tax Act, 1961 (in brevity the Act) for assessment year 2016-17. The impugned order was emanated from the order of ld. DCIT, Central Circle-1, Jalandhar (in brevity the AO) order passed u/s 143(3) of the Act. 2. The assessee has taken the following grounds: 1. That the order passed by the Hon ble CIT (A) dated 26.04.2022 is against the law and facts of the case. 2. That having rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oying the cash credit limit and it is noticed that there is no change in the cash credit limit. So, there is no addition funds are raised. Accordingly, the ld. AO disallowed the 50% of the interest claim which is amount to Rs. 41,44,372/-. Aggrieved assessee filed an appeal before the ld. CIT(A). The ld. CIT (A) upheld the order of the ld. AO. Being aggrieved assessee filed an appeal before us. 5. The ld. AR filed the written submissions which are kept in the record. It is placed that in case of ground nos. 1, 2 and 3 are not pressed. Only Ground Nos. 4 and 5 are pressed for adjudication. 6. Ground No. 6, this ground is general in nature. Ground Nos. 4 and 5 7. On perusal of the submission the loss was carry forward from the earlier assessment years. But loss was rejected in impugned assessment year due to the demand raised by the revenue in preceding years where the loss was occurred. In appeal all the years were adjudicated in favour of assessee and loss is eligible to allow in favour of the assessee by the order of the ITAT, Amritsar Bench bearing ITA No. 583 to 585/Asr/2019 date of order 11.08.2022. The relevant paragraph is extracted as below:- 6.12. Respectful observation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the same has been allowed by the Hon ble ITAT, Amritsar vide order dated 11.08.2022 ( relevant page 23 para 7 of the ITAT order, copy of order enclosed) thus it is requested that benefit of carry forward losses may kindly be allowed to assessee as it is legally entitled to all the claim and carry forward losses of earlier years and also Hon ble ITAT has allowed the appeal of assessee and no addition was sustained and all the claims were accepted. Sir, it is also submitted that Hon ble CIT (A) in the Appellate order last page stated that assessee has not taken any such ground of set off of the losses, in this regard it is stated that in AY 2012-13, 2013-14 and AY 2014-15, losses were there for the reason that assessee claimed interest expense as claimed in the current year also and these interest expense were disallowed by the Ld. AO and ground relating to disallowance of interest expense was taken and thereafter entire appeal (including this interest expense ground) were allowed by Hon ble ITAT, Amritsar. Thus, when the appeal of assessee was allowed that means interest expense were allowed, therefore the losses are automatically allowed to the assessee. Thus there is no force in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for the business purposes. Sir, it is submitted that a business activity consists of three stages: the first stage relates to the activity necessary for the purpose of acquiring the raw material and establishment of plant and machinery and the second activity comprises the processing and manufacturing by using the raw material and the plants and machinery set up for the purpose and the third category consisted of the marketing thereof. The first in point of time lays the foundation for the second activity and the second activity when completed lays the foundation for the third activity. Therefore, the expenditure incurred for carrying on any of these activities including the first activity is also deductible in computing the profits and gains of the assessee for the relevant year when the activity is undertaken. Thus in the present case also business was very well being carried in this immovable assets and this fact has been accepted by the Ld. AO himself that these immovable assets are productive assets of assessee s business. It is not a case where assets are purchased and kept idle and not utilized for the business, but a case where the immovable assets are very well utilized ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled for the carry forward loss claimed by the assessee. 9. We heard the revenue s submission, peruse the orders of revenue authorities and consider the documents available in the record. Related to ground no. 4, the assessee already placed that the activities of the assessee are more requirement of lands for maintaining the livestock, chilling of milk, distribution. All are related to business. Further the opening and closing balance of cash credit limit does not reveal that there is no use of funds of the assessee. The ld.AR relied on the order of Hon ble Apex Court in the case of Vardhman Polytex Ltd. v. Commissioner of Income-tax [2012] 25 taxmann.com 281 (SC), the relevant paragraphs are reproduced as below:- The question which arises for determination in these civil appeals filed by the assessee is as follows: Whether interest paid in respect of borrowings for acquisition of capital assets not put to use in the concerned financial year can be permitted as allowable deduction under section 36(1)(iii) of the Income-tax Act, 1961? This question has been answered in favour of the assessee in the case of Dy. CIT v. Core Health Care Ltd. [2008] 298 ITR 194/167 Taxman 206 (SC). Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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