|The Tax Publishers2021 TaxPub(DT) 0227 (Mum-Trib)
INCOME TAX ACT, 1961
Where the assessee claimed loss in the year 2014-15, the assessment for which was pending, then AO was directed to allow set off of such loss in the year 2016-17 and 2017-18, however as to refund the AO will have to take a call keeping in mind the provisions of section 240.
Refund - Withholding of refund - Loss not allowed to be carried over -
Assessee company was incorporated in Cayman Islands and was engaged, inter alia, in the business of providing drilling services in connection with exploration and production of mineral oil. In the income-tax return filed by assessee for the assessment year 2014-15, the assessee had claimed a loss of Rs. 80,99,58,751 but, as a result of additions made by the AO the income finally assessed in the hands of the assessee was a positive income of Rs. 6,55,22,160. Aggrieved, assessee carried the matter in appeal before a coordinate Bench of the Tribunal. The coordinate Bench nevertheless remitted the matter to the file of the AO for framing the assessment de novo. The remanded assessment proceedings were pending before the AO. The AO, in the draft assessment orders for these assessment years, declined this set-off. Assessment for assessment year 2014-15 was completed under section 143(3) read with section 144C(13) determining total income at Rs. 6,15,22,160 as against the returned loss of Rs. 80,99,58,751, Thereby, unabsorbed loss for assessment year 2014-15 does not exist and was not available to be set off against business income of assessment years 2016-17 and 2017-18. Assessee requested for allowing the set-off of the unabsorbed business losses pertaining to assessment year 2014-15. The assessee was aggrieved and was in appeal. Held: In the present case, the coordinate Bench decision, by virtue of which the assessment under section 143(3) was remanded to the AO, was passed on 4-10-2019, whereas the related income-tax returns for the present assessment years were filed by the assessee much before that date. The refunds, if any due to the assessee, have thus become due as a result of the appellate order, dt. 4-10-2019. In the present case, refund of taxes for the present assessment years must wait the finalization of the assessment for the assessment year 2014-15 because of which the refund may arise. The Tribunal upheld the plea of the assessee that so far as set off of loss returned by the assessee in the assessment year 2014-15 was concerned, the same could not be declined by the AO in the assessment years 2016-17 and 2017-18, if otherwise admissible, only for the reason that the assessment for the assessment year 2014-15 was in progress. The AO was directed to allow, for the time being, the claim for set off of loss brought forward, the above direction, however, should not be construed direction for the grant of refund, if any is found admissible as a result of income computed as above, for the simple reason that a call will have to be taken by the AO as to whether, in the light of the discussions above, refund of taxes was permissible in such a situation in the light of first proviso to section 240.
FAVOUR : In assessee's favour/matter remanded.
A.Y. : 2016-17 & 2017-18
IN THE ITAT, MUMBAI I BENCH
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