SOUTHERN CRATES AND CONTAINERS P LTD Vs. ASSTT COMMISSIONER OF INCOME TAX DIVISION II
INCOME TAX APPELLATE TRIBUNAL
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Riyaz S. Padvekar, Judicial Member -
(1.) THIS appeal by the assessee is directed against the order of the Commissioner of Income-tax(Appeals)-V, Kochi dated 16-2-2005 for the Assessment Year 1996-97.
(2.) The issue on merits which arises for our consideration in this appeal is whether the Assessing Officer was justified in working out the allowable deduction Under Section 80-I of the Act after setting off the business loss for the asst. year 1995-96.
The fact of the case are in a narrow compass. The assessee company is engaged in the production of plastic containers. The original assessment of the assessee was completed Under Section 143(3) on 26-3-1997. But subsequently, notice Under Section 148 was issued on the reason that excess deduction has been allowed Under Section 80-I without considering the business loss of Rs. 3,05,100/- relating to the asst. year 1995-96.
(3.) THE learned sr. counsel submitted that in respect of the asst. year 1995-96, the assessee filed the return of loss declaring net loss of Rs. 3,05,100/- on 02-04-1996. THE AO completed the assessment of the assessee Under Section 143(3)for the asst. year 1995-96 on 21-1-1997 and the AO refused to carry forward the business loss to the extent of Rs. 3,05,099/- on the ground that the return was belatedly filed by the assessee. However, unabsorbed depreciation was allowed to be carried forward to the subsequent year. THE assessee accepted the order of the AO for the asst. year 1995-96 and it reached finality. While filing the return of income for the asst. year 1996-97, the assessee claimed deduction Under Section 80-I without considering the business loss for the asst. year 1995-96 but unabsorbed depreciation brought forward of Rs. 4,08,650/- was reduced for the purpose of working Under Section 80I. Though initially the claim of the assessee was accepted in the asst. year 1996-97, but subsequently, on the basis of audit objection, notice Under Section 148 was issued and the AO reduced the profit by setting off the business loss for the asst. year 1995-96 and restricted the deduction.;
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