The Income Tax Appellate Tribunal (ITAT), Ahmedabad, the business loss cannot be refused as Assessing Officer has not declined books of accounts.
The taxpayer, Nilamben Sandipbhai Parikh is involved in the business of trading in dyes, chemicals & intermediates. The taxpayer has furnished an e-return of income dated 30.09.2019 showing a total income of Rs. Nil. In the year the taxpayer has shown a gross turnover of Rs.75,89,25,857, gross profit of Rs. (-) 79,40,824 and net profit of Rs. (-) 47,01,251.
Post to closing some disallowances or additions have taken forward with a net loss of Rs 46,98,715 to the forthcoming year by the taxpayer. Post to thinking about the submissions made by the taxpayer, the assessing officer incurred the additions of Rs 24,22,048 concerned to the unaccounted buyings of Rs 47,01,251 for the disallowance of loss and Rs 3,72,785 for the disallowance of the service tax filed.
Dissatisfied with the assessment order the taxpayer furnished the petition to the CIT(A). The petition would have been dismissed by CIT(A). Disappointed by the order of the CIT, the taxpayer in appeal to the Tribunal.
The Bench consists of Annapurna Gupta, an Accountant Member, and Suchitra Kamble, a Judicial Member who acknowledged the disallowance of a business loss of Rs.47,01,251, AR furnished, there is seen no rejection in the taxpayer’s books seen ever, and the business loss information was being under the assessing officer and before CIT(A). Thus that must not be permitted.
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The Tribunal mentioned that “The CIT(A) has directed the Assessing Officer to compute the taxable income of the assessee but has not directed the business loss quantified by the assessee to be taken into cognizance. The books were never rejected by the Assessing Officer and thus business loss cannot be disallowed without taking cognizance of all the relevant aspects of the matter. Therefore, we direct the Assessing Officer to compute the taxable income thereby granting the business loss after verifying the quantification of the loss claimed by the assessee. Needless to say, the assessee is given the opportunity of hearing by following the principles of natural justice.”
M K Patel is the Counsel for the appellant and G C Daxini is the Counsel for the respondent.
