Ita/853/2009 Of The Commissioner Of Income Tax,Cochin v. Kuttanad Credit & Investment (P) Ltd

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU TUESDAY, THE 24TH DAY OF MAY 2016/3RD JYAISHTA, 1938 ITA.No. 853 of 2009 ( ) ------------------------ AGAINST THE ORDER/JUDGMENT IN ITA 1108/COCH/2004 of I.T.A.TRIBUNAL,COCHINBENCH DATED 14-06-2005 APPELLANT(S)/APPELLANT: ---------------------- THE COMMISSIONER OF INCOME TAX, COCHIN BY ADVS.SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S)/RESPONDENT: -------------- KUTTANAD CREDIT AND INVESTMENTS PVT. LTD 39/4046, CHAKIAT CHAMBERS,RAVIPURAM,, COCHIN-682016. BY ADV.VINOD CHANDRA K. THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 24-05-2016,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX IN ITA.853/09 APPELLANT'S EXHIBITS: ANNEXURE A: COPY OF ORDER U/S.143(3) R.W.S.1`47 OF THE INCOME TAX ACTDTD.19.1.2001 FOR THE ASSESSMENT YEAR 1996-97.DTD.19.1.2001 FOR THE ASSESSMENT YEAR 1996-97. ANNEXURE B: COPY OF THE ORDER DATED 16.8.2004 OF THE COMMISSIONER OFINCOME TAX (APPEALS).INCOME TAX (APPEALS). ANNEXURE C: COPY OF THE ORDER DATED 14.6.2005 OF THE INCOME TAXAPPELLATE TRIBUNAL COCHIN BENCH COCHIN IN ITA.NO.1108/04.APPELLATE TRIBUNAL COCHIN BENCH COCHIN IN ITA.NO.1108/04. /TRUE COPY/ PS TO JUDGE ANTONY DOMINIC & DAMA SESHADRI NAIDU, JJ. -----------------------------------I.T.A.No.853 of 2009----------------------------------- Dated this the 24[th] day of May, 2016 JUDGMENT Antony Dominic, J. 1. This appeal filed by the Revenue is directed againstthe order passed by the Income Tax AppellateTribunal, Cochin Bench in ITA.No.1108/04, concerningthe assessment year 1996-97. The short questionraised before the Tribunal was whether theCommissioner of Income Tax (Appeals) erred in holdingthat unabsorbed business loss brought forward fromthe earlier years should be set off against dividendincome. In the order of assessment, the AssessingOfficer has found that during the relevant assessmentyear, the assessee had set off net profit of`2,27,255/- against unabsorbed loss carried forwardfrom the assessment year 1994-95. This was held tobe impermissible on the ground that as per section 72of the Income Tax Act, carried forward loss can beset off only against the head 'profit and gains ofany business or profession'. It was found that theassessee is an investment company and is not doingany trading transactions. Therefore, the income is ITA.853/09 not a business income and is income from othersources, which could not be set off. However, thisorder was set aside by the Commissioner (Appeals) andthat order was confirmed by the Tribunal. 2.Reading of the order passed by the Commissioner(Appeals) and the Tribunal show that the only basison which the authorities have allowed the appeal ofthe assessee was the judgment judgment dated 3.8.2002passed by this Court in ITA.No.96 of 2000. Readingof that judgment shows that the assessee therein inan investment company doing business in shares anddebentures. The assessee had returned the dividendincome under the head 'other sources' but had claimedset off against the carried forward business loss.It was this claim of the assessee that was upheld bythis court. 3.From the above itself, it is obvious that unlike thecase of the respondent herein, who is only aninvestment company which is not engaged in anytrading transactions, the assessee in ITA.96/00 wasengaged in the business of shares and debentures.case of the respondent herein, who is only aninvestment company which is not engaged in anytrading transactions, the assessee in ITA.96/00 wasengaged in the business of shares and debentures. 3.From the above itself, it is obvious that unlike thecase of the respondent herein, who is only aninvestment company which is not engaged in anytrading transactions, the assessee in ITA.96/00 wasengaged in the business of shares and debentures.case of the respondent herein, who is only aninvestment company which is not engaged in anytrading transactions, the assessee in ITA.96/00 wasengaged in the business of shares and debentures. Therefore, on facts, the principles laid down by thisCourt in ITA.96/00 are inapplicable to the case ofthe respondent assessee and consequently, the orderpassed by the Commissioner (Appeals), which wasupheld by the Tribunal applying the principles laiddown by this Court, is erroneous. In the aforesaid circumstances, we set aside theorder passed by the Commissioner (Appeals) andanswering the question of law in favour of theRevenue, this appeal is allowed. Sd/- ANTONY DOMINIC, Judge. Sd/- DAMA SESHADRI NAIDU, Judge. kkb.