DCIT Vs Bansal Steels Power Ltd. (ITAT Delhi)
No Change in Shareholding – ITAT Delhi Allows Carry Forward of Losses to Bansal Steels Power Ltd
ITAT Delhi dismissed the Revenue’s appeal & partly allowed Assessee’s cross-objection, upholding CIT(A)’s decision allowing carry forward of business losses to subsequent years.
AO had denied the benefit u/s 79, alleging that a change in shareholding pursuant to an NCLT order under the IBC Code triggered restrictions on loss carry forward without approval from PCIT. CIT(A), however, found that no change in shareholding had occurred during AY 2018-19 & held that Section 79 applies only in the year when the set-off is actually claimed. Relying on CIT v. Manmohan Das (59 ITR 699, SC), CIT(A) directed AO to allow the carry forward of losses.
Tribunal agreed, observing that the issue of eligibility to set off carried-forward losses arises only when such set-off is claimed in a later year, not at the stage of current-year assessment. It also noted that the tax effect was below CBDT’s monetary threshold (Circular No. 9/2024 dated 17.09.2024), warranting dismissal of Revenue’s appeal on that ground as well.
As for the disallowance of employees’ PF & ESI contributions, the ITAT upheld the CIT(A)’s view following the Supreme Court decision in Checkmate Services (P) Ltd. v. CIT.
