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Case Law Details

Case Name : Mahaluxmi Food Industries Vs ITO (ITAT Chandigarh)
Appeal Number : ITA No. 711/Chd/2022
Date of Judgement/Order : 01/06/2023
Related Assessment Year : 2013-14
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Mahaluxmi Food Industries Vs ITO (ITAT Chandigarh)

Introduction: In a landmark ruling, the ITAT Chandigarh adjudicated in favour of the appellant, Mahaluxmi Food Industries, in a case against the Income Tax Officer (ITO). The dispute revolved around the disallowance of carry forward losses against the appellant’s surrendered business income under Section 115BBE(2) of the Income Tax Act, 1961.

Analysis: In the case, the appellant challenged the Assessing Officer’s (AO) decision of rejecting the carry forward losses against the surrendered business income. The appellant argued that the AO didn’t make any addition under sections 68/69/69A/69B/69C/69D of the Income Tax Act and, therefore, there was no ground for disallowance.

The ITAT, considering the arguments and the relevant provisions of the law, found merit in the appellant’s claim. The tribunal noted that the AO had changed the nature of the income and applied the provisions of Section 1 15BBE(2) to disallow the set off of loss against surrendered income in the proceedings carried out under Section 154 of the Act.

It was highlighted that the amendment to Section 115BBE was introduced vide Finance Act, 2016 effective from 01.04.2017, and the case at hand related to A.Y. 2013-14. Furthermore, the tribunal cited CBDT Circular No.11 of 2019, which clarified that an assessee could claim set off of loss against income determined under Section 115BBE of the Act until the assessment year 2016-17.

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July 2024