Itxa/432/2012 Of Mahameru Trading Co.p.ltd v. The Income Tax Officer, Ward-5(2)-3

sbw *1* IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.432 OF 2012 Mahameru Trading Co.P. Ltd.-Versus-The Income Tax Officer ..Appellant ..Respondent ........... Mr. Nishit Gandhi with Samir G. Dalal for the Appellant.Mr. N. C. Mohanty for the Respondent. ........... CORAM: S.C. DHARMADHIKARIAND B.P. COLABAWALLA, JJ. DATE :- 17[th] JULY, 2014 P.C.: 1]This is an assessee's appeal. The assessment year is 2003-04. The Tribunal confirmed the concurrent findings which have been rendered by both the Assessing Officer as also the Commissioner of Income Tax (Appeals) by the impugned order dated 2[nd] November, 2011. 2]In the submission of the learned counsel appearing for the assessee, this appeal raises a substantial question of law even though, it may be questioning some concurrent findings. The concurrent findings are based on a incorrect and erroneous understanding of the legal provision. Therefore, this is an appeal which gives a rise to the questions of law 1/5 termed as substantial and formulated at page 13 of the paper book. 3]In supporting the submissions that the questions of law are substantial, reliance is placed upon section 80 of the Income Tax Act, 1961 and the judgment of the Hon'ble Supreme Court in the case of Commissioner of Income Tax V/s. Sun Engineering Works (P) Ltd. (1992) vol.198 ITR 297. It is submitted that the Tribunal could not have concluded that there was any waiver of the right by the assessee in any manner. When the legal provision permits the course which the assessee adopted so also the scope of re-assessment being limited, then, such findings are totally vitiated, is the submission. 4]We are unable to agree because the appellant does not dispute that it is engaged in the business of investment in shares and securities. For the assessment year 2002-03 the appellant-assessee filed a return of income on 31[st] October, 2002 declaring a loss of Rs.4,45,100/-. It was also the case of the assessee that together with this return, it filed a statement of unabsorbed carried forward business losses, aggregating to Rs.75,91,540/-. For the year under consideration namely 2003-04, the return of income was filed on 28[th] November, 2003. The income of Rs.11,66,075/- was adjusted against the brought forward loss of earlier years amounting to Rs.75,89,440/- and the balance loss of Rs.64,23,365/- was carried forward. The return of income was processed under section 143(1) of the Act accepting the returned loss as claimed by the appellant. Thereafter, the appellant's case for assessment year 2002-03 was reopened under provisions of section 148 of the Income Tax Act on 31[st ]March, 2009. In response to the notice issued under section 148 of the Act, a return of income was filed by the assessee wherein it revised its computation of income to the extent that the disallowance under section 14A was computed at Rs.5,91,741/- but restricted to Rs.4,45,101/- being the total expenses incurred during the year. In other words, there was nil income as against loss of Rs.4,45,101/- claimed in the original return of income. 5]We take these facts from the memo of appeal in the present case as also the stand taken by the assessee during the course of the proceedings. The re-assessment order, then, was passed on 18[th] November, 2009 accepting the income at nil. Thereafter the case of the appellant for assessment year 2003-04 was reopened and by issuing notice under section 148. The appellant filed a return of income on 2[nd] December, 2009 and this time declared a loss of Rs.59,78,265/- after adjusting the brought forward losses of the earlier years. In relation to this return of income, the re-assessment proceedings resulted in a response from the appellant. 5]We take these facts from the memo of appeal in the present case as also the stand taken by the assessee during the course of the proceedings. The re-assessment order, then, was passed on 18[th] November, 2009 accepting the income at nil. Thereafter the case of the appellant for assessment year 2003-04 was reopened and by issuing notice under section 148. The appellant filed a return of income on 2[nd] December, 2009 and this time declared a loss of Rs.59,78,265/- after adjusting the brought forward losses of the earlier years. In relation to this return of income, the re-assessment proceedings resulted in a response from the appellant. Upon furnishing the return, what the authorities have found is that the appellant claimed carried forward of the losses in the original return however, the carried forward losses remained to be claimed in the return filed in response to notice under section 148 of the Act. Thus, the assessee was claiming carried forward losses in the original return but in the return filed in response to notice under section 148 that was not claimed. The Assessing Officer found that the record shows neither the original return nor the revised return contained any carried forward of losses as claimed by the assessee. Then, the matter was carried before the Commissioner of Income Tax (Appeals) and while considering the rival contentions, the Commissioner of Income Tax (Appeals) upheld the action of the Assessing Officer. We found that when the case was reopened looking into certain discrepancy the action of the Assessing Officer is correct because the appellant filed revised return of assessment year 2003-04 wherein the losses of earlier years were not claimed. The revised return was filed and when the Assessing Officer concluded that the losses were not carry forward in the revised return as well, that the finding of such a claim having been given up, has been rendered. In fact the Court gave one more opportunity to the assessee in appellate proceeding to justify the claim but there was no satisfactory explanation given for the losses claimed in the earlier years and except for assessment year 2002- 03. The losses were not disclosed in the revised return. Though, those were shown in the original return. 6]When such are the findings and which have been undisputed, we do not find that the Tribunal committed any error of law apparent on the face of the record, or perversity in dismissing the assessee's appeal and upholding the concurrent view. From para-9 of the order under challenge cogent and satisfactory reasons have been assigned. We can't only pick a sentence here and there and hold that the finding of the Tribunal is essentially based on some principle of waiver. We have already explained that it is the claim and which was based on the carry forward of the past losses, it is held to have been given up. At best, the Tribunal's choice of the words may be erroneous but we do not find that its ultimate conclusion gives rise to any substantial question of law. We are not required to go into larger controversy or wider question because in the peculiar facts of this case, the concurrent findings are not vitiated at all. The appeal is devoid of merits and it is, therefore, dismissed. No costs. (B.P.COLABAWALLA, J.) (S.C. DHARMADHIKARI, J.) wadhwa 5/5