Take notes as you read a judgment using our Virtual Legal Assistant and get email alerts whenever a new judgment matches your query (Query Alert Service). Try out our Premium Member services -- Free for one month.\n\nIncome Tax Appellate Tribunal - Chennai\nDcit, Central Circle 2(2), Chennai vs N Ramasamy, Chennai on 29 December, 2023\n           आयकर अपीलीय अिधकरण, 'ए',              यायपीठ, चे ई\n  IN THE INCOME TAX APPELLATE TRIBUNAL, 'A' BENCH : CHENNAI\n\n        ी महावीर संह, उपा य एवं ी मंजुनाथ. जी, लेखा सद य के सम\n     BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND\n           SHRI MANJUNATHA.G, ACCOUNTANT MEMBER\n\n           आयकर अपील सं./I.T.A Nos.127 & 128/CHNY/2019\n       िनधारण वष /Assessment years   : 2015-2016 & 2016-2017\n\nThe Deputy Commissioner of     Vs.       Shri. N. Ramasamy,\nIncome Tax,                              No.14/19, Saraswathi Street,\nCentral Circle 2(2),                     Mahaingapuram,\nNungambakkam High Road,                  Chennai 600 034.\nChennai 600 034.\n                                         [PAN ADUPR 8003P]\n(अपीलाथ /Appellant)                      ( यथ /Respondent)\n\nअपीलाथ क ओर से/ Appellant by         :   Shri. Nilay Baran Som, IRS, CIT.\n यथ क ओर से /Respondent by           :   Shri. S. Sridhar, Advocate\n\nसुनवाई क तारीख/Date of Hearing               :   18.12.2023.\nघोषणा क तारीख /Date of Pronouncement         :   29.12.2023\n\n                                आदेश / O R D E R\n\nPER MAHAVIR SINGH, VICE PRESIDENT:\n\n\n         These two appeals filed by the Revenue are arising out of two\n\ndifferent orders of the Commissioner of Income Tax (Appeals)-18,\n\n(hereinafter the 'CIT(A)") Chennai in ITA Nos.281/17-18 and 282/17-18,\n\ndated 03.10.2018 respectively for the assessment years 2015-2016 and\n\n2016-2017. The assessments were framed by the Assistant Commissioner\n\nof Income Tax, Central Circle 2(2), Chennai for the assessment years\n\n2015-2016 and 2016-2017, u/s.143(3) r.w.s. 153A of the Income Tax Act,\n                                      :- 2 -:           ITA Nos.127 & 128/Chny/2019\n\n\n\n1961 (hereinafter the 'Act') and u/s.143 (3) of the Act, vide orders            of\n\neven date 29.12.2017.\n\n\n2.        First we take up ITA No.127/CHNY/2019 for the               assessment\n\nyear 2015-2016 for adjudication. The first issue in this appeal of Revenue\n\nis with regard to order of the CIT(A) in deleting the addition made by the\n\nAssessing Officer being unexplained amount of gift received from his\n\nmother late Smt. Radha Narayanan to the tune of ₹1,74,00,000/-. For\n\nthis, the Revenue has raised the following grounds of appeal.\n\n\n\n      ''2.1. The Learned CIT(A) erred in deleting the addition of\n      Rs.1,74,00,000/-, claimed by the assessee as gift received from his\n      mother, on the ground that the gift is genuine.\n\n      2.2. The Learned CIT(A) failed to appreciate that the assessee was unable\n      to produce any document in support of his claim of gift, state the mode of\n      receipt of gift and not even able to furnish the date of receipt of the gift.\n\n      2.3. The Learned CIT(A) ought to have noted that the assessee has not\n      stated the occasion which necessitated gift of a whopping amount of\n      Rs.1,74,00,000/- by the assessee's mother in favour of the assessee.\n\n      2.4. The Learned CIT(A) failed to note that the assessee could have\n      received the gift by cash only, in the light of the quantum of gift not\n      getting reflected in the assessee's bank account, and it is illogical that a\n      person would have kept cash of Rs.1.74 crores in her possession, before\n      gifting the cash to his son''.\n\n\n3.        The brief facts of the case are that there was search and seizure\n\noperation conducted on the assessee on 30.09.2015. During the course of\n\nsearch certain incriminating materials were found and seized. Based on\n\nseized material, assessee had admitted an amount of ₹2,65,00,000/- as\n                                    :- 3 -:         ITA Nos.127 & 128/Chny/2019\n\n\n\nadditional income for the financial year 2014-2015 relevant to assessment\n\nyear 2015-16. Assessee had also agreed to disclose a sum of\n\n₹5,50,00,000/- to meet out the cost of acquisition of distribution rights of\n\nAranmanai movie and       PISSASU movie. To explain       the investments,\n\nassessee stated that out of total cost of acquisition of these movies of\n\n₹10,70,00,000/-, assessee has invested sum received from his mother late\n\nSmt Radha Narayanan of ₹1,74,00,000/- as gift. Assessee tried to explain\n\nthat the gift amount received from his mother of ₹1,74,00,000/- may be\n\nconsidered for set off against admitted income of ₹2,65,00,000/- and\n\n₹5,50,00,000/- during the search. The Assessing Officer noted that the\n\nassessee is unable to file any proof in support of gift received from his\n\nmother amounting to ₹1,74,00,000/- and hence he added this amount as\n\nunexplained by observing at para 6.2 and 6.4 of his assessment as under:-\n\n      ''6.2 With regard to gift amount of Rs. 1,74,00,000/-\n      received from his mother late. Smt. Radhananrayanan\n      there is no proof in support of amount received and date of\n      receipt and no proof for the mode of receipt. During\n      scrutiny also except stating as gift received, no evidence\n      was produced in support of his claim of gift received from\n      his mother late. Smt. Radhananrayanan. In the absence of\n      sufficient evidence/proof in support of the assesse claim of\n      gift amount of Rs. 1,74,00,000/- is not acceptable.\n\n      6.4 In view of the above discussion, the assessee claim of\n      gift amount of Rs. 1,74,00,000/- received from his mother\n      late. Smt. Radhananrayanan and undisclosed realization of\n      the picture "Aranmanai amounts of Rs. 91,00,000/- was\n      not considered in the absence of proper evidence/proof and\n      accordingly the above amount of Rs. 2,65,00,000/- added\n      back to the assessee total income''.\n                                  :- 4 -:         ITA Nos.127 & 128/Chny/2019\n\n\n\nAggrieved, assessee preferred an appeal before the CIT(A).\n\n4.       The CIT (A), simpliciter, on the basis of statement of assessee\n\naccepted the explanation of the assessee by basing his reasoning on\n\nconjectures and surmises and accordingly he deleted the addition that\n\nreceipt of ₹1,74,00,000/-   as unexplained is not    backed by      proper\n\nreasons, hence he deleted the addition by observing as under:-\n\n      ''5.2. Smt. Radha Narayanan is no more and as the legal\n      heir of Smt.Radha Narayanan, the Appellant naturally\n      inherits the amounts held by her. Therefore, the availability\n      of source in the hands of Smt. Radha Narayanan during her\n      life time is the issue to be examined. Consequent to the\n      Search Action in the group (late) Smt. Radha Narayanan\n      was assessed to tax for the .AY.2012-13 in respect of her\n      income u/s 153A of the Act. The appeal against the order\n      passed on 2812.2017 was adjudicated by this office in ITA\n      No.34/18-19 dated 28.8.2018 in which, the appeal of the\n      Smt. Radha Narayanan was allowed. The appellant on\n      behalf of Smt. Radha Narayanan had filed the Return of\n      Income for the A.Y.2012-13 admitting a taxable income of\n      Rs 1,14,37,860/- The issue under consideration in the said\n      appeal was whether the addition made of Rs.38,50,000/-\n      as LTCG is exempt otherwise. The Appellate proceedings\n      found that the said land was agricultural in nature and\n      cannot be termed as a capital asset as per section 2(14) of\n      the Act. Independent of the finding, it is a foregone\n      conclusion at present, that Smt. Radha Narayanan had the\n      creditworthiness to provide such a sum to her son being the\n      appellant.     Therefore,   treating   the     receipt     of\n      Rs.1,74,00,000/- as unexplained is not backed by proper\n      reasons and hence the corresponding addition is deleted''.\n\nAggrieved, now the Revenue is in appeal before us.\n                                   :- 5 -:        ITA Nos.127 & 128/Chny/2019\n\n\n\n5.       We have heard rival contentions and gone through the facts and\n\ncircumstances of the case. We note that assessee neither before the\n\nAssessing Officer nor before the CIT(A) has submitted any details except\n\nthat late Smt. Radha Narayanan was assessed to tax for the assessment\n\nyear 2012-2013 in respect of her income u/s.153A of the Act and an\n\nappeal against the order    was adjudicated in ITA No.34/18-19 dated\n\n28.08.2018   wherein   admitted    taxable   income   was    assessed    at\n\n₹1,14,37,860/- and assessed addition of ₹38,50,000/- was made. Before\n\nus, the ld. Counsel for the assessee submitted that he is ready to file\n\nevidences to prove the genuineness of the gift         and also will file\n\nassessment record for assessment year 2012-2013 wherein the donor late\n\nSmt. Radha Narayanan     had admitted her income and will also file the\n\nnexus of this amount with the gift amount.         After considering the\n\nsubmissions of the assessee counsel and the rival submissions of ld.\n\nCIT(DR), we note that assessee be given one more opportunity to file\n\nthese details before the Assessing Officer to prove his claim of\n\ngenuineness of the gift received from his mother late Smt. Radha\n\nNarayanan.   Assessee will file all the details to prove that the amount\n\nreceived during the financial year 2011-12 with that of money received in\n\nthe financial year 2014-15 relevant to the assessment year 2015-2016.\n\nHence,   this issue is set aside and remitted back to the file of the\n                                   :- 6 -:        ITA Nos.127 & 128/Chny/2019\n\n\n\nAssessing Officer who will adjudicate the issue with    proper reasoning\n\nafter hearing to the assessee.\n\n\n6.       The second issue in this appeal is as regards to the order of\n\nthe ld. CIT(A) deleting the disallowance made by the Assessing Officer of\n\nexpenditure claimed or incurred      on account of movie ''Aranmanai''\n\namounting to ₹3,36,00,155/-. For this, the Revenue has raised the\n\nfollowing ground Nos. 3.1 and 3.2.\n\n      ''3.1. The Learned CIT(A) erred in deleting the disallowance of\n      Rs.3,36,00,155/-, claimed by the assessee as expenditure\n      incurred for the movie "Aranmanai".\n\n      3.2. The Learned CIT(A) failed. to appreciate that according to\n      clause 8 of the Minimum Guarantee Agreement, executed by the\n      assessee distributor with the producer, the amounts spent by\n      the assessee towards paper publicity, hoardings, promotion,\n      etc., will be on the producer's account and therefore, there can\n      be no scope for the assessee to claim expenditure towards\n      advertisement, marketing, distribution, etc''.\n\n\n\n\n7.       The brief facts of the case are that during the course of search\n\nproceedings incriminating materials were seized and it was found that\n\nassessee had acquired distribution rights of the movie Aranmanai for a\n\nconsideration of ₹10,70,00,000/- i.e. ₹5,20,00,000/- in Cheque and\n\nbalance ₹5,50,00,000/- in cash.       The Assessing Officer noted that\n\nassessee has not maintained proper books of accounts and has asked for\n\nexplanation. The assessee submitted that other expenses amounting to\n                                   :- 7 -:         ITA Nos.127 & 128/Chny/2019\n\n\n\n₹3,36,00,155/- was also incurred for the purchase of Aranmanai movie\n\napart from the purchase cost. The Assessing Officer noted that assessee\n\nhas failed to produce sufficient evidence in support of his claim and hence\n\nhe added this amount of ₹3,36,00,155/- to the total income of the\n\nassessee by observing in para 7.1 as under:-\n\n      ''7.1 But during the scrutiny the assessee AR failed to\n      produce sufficient evidence in support of his claim of\n      expenditure ie,. Bills/and mode of payment etc.,. Moreover\n      Out of the total purchase cost of Rs. 10.70 crores the\n      assessee admitted only 5.00 crores in the books and an\n      amount of Rs 5.70 Crores paid as cash out side the books.\n      This means the assessee has not maintained the proper\n      books of accounts the same is accepted by the assessee at\n      the time of search. In this circumstances the expenditure\n      claimed amounting to Rs. 3,36,00,155/- without proper\n      bills/ vouchers and also in the absence of proper payment\n      details/mode of payment etc., the assessee claim of\n      additional expenditure claim is not acceptable. This issue\n      was never stated by the assessee at the time of search\n      proceedings also. Hence in the absence of sufficient\n      evidence/proof in the support of the assess claim, the\n      additional amount claimed as expenditure towards\n      purchase of "ARANMANAI" movie amounting to Rs.\n      3,36,00,155/- is disallowed added back to the assessee\n      total income''.\n\nAggrieved, assessee preferred an appeal before the CIT(A).\n\n8.       The CIT(A) deleted addition by observing as under:-\n\n      ''7. The same principle applies to the addition of Rs.\n      1,07,56,041/- in respect of the movie "PISASU". On\n      verification of the cost, it is seen that, the same constitutes\n      delivery, poster pasting, digital printing, and publicity\n      expenses. A major portion of the expenditure have also\n                                   :- 8 -:         ITA Nos.127 & 128/Chny/2019\n\n\n\n      suffered TDS and hence the genuineness of the same is not\n      far from doubt. The copies of Ledger folio of the\n      Corresponding expenditure are also available in the\n      assessment record and it is found that the sums have\n      actually been incurred. On the contrary, the A.O. has not\n      illustrated that the expenses are otherwise bogus. Under\n      such circumstances, when the search proceedings have not\n      revealed anything contrary or adverse with regard to the\n      genuineness of the expenses, the addition made of Rs.3.36\n      Crores and 1.07 Crores are incorrect and therefore directed\n      to be deleted. Accordingly, the corresponding Grounds of\n      appeal are allowed''.\n\nAggrieved, now the Revenue is in appeal before us.\n\n9.       We have heard rival contentions and gone through the facts and\n\ncircumstances of the case. Before us, the ld. CIT(DR) heavily relied on\n\nthe assessment order and he argued that the assessee is unable to\n\nproduce any evidence in respect of claim of expenditure that he has spent\n\n₹3,36,00,000/- for purchase of movie apart from the purchase cost. He\n\nargued that CIT(A) without bringing any evidence on record deleted the\n\naddition simpliciter on the reasoning that major portion of expenditure had\n\nsuffered TDS and hence genuineness of the same is far from doubting.\n\n\n\n\n10.      On the other hand, the AR for the assessee drew our attention\n\nto assessee's submission filed before the CIT(A) that all documents and\n\npapers were seized by the investigation authorities which are nothing but\n\ndocuments relating to these expenses which are very much available on\n                                    :- 9 -:         ITA Nos.127 & 128/Chny/2019\n\n\n\nrecord. He argued that the supporting documents relating to the above\n\nsaid expenditure are in the possession of the Income Tax Department\n\nonly.\n\n\n\n11      We have noted that there is no such argument          noted by the\n\nCIT(A). He has simpliciter deleted the addition on the basis that the\n\nexpenditure had suffered TDS and copies of ledger folio of the\n\ncorresponding expenditure is available in the assessment records . As the\n\nfindings is incomplete and unreasonable, there may be documents\n\navailable in the assessment records and the seized material relating to\n\nthese expenses, the should have been examined and then this issue could\n\nhave been decided. Hence in the interest of justice, the matter is set aside\n\nand remit back to the file of the Assessing Officer who will re adjudicate\n\nthe issue after examining the seized material in the possession of\n\ndepartment. The AO will find out the seized material and confront the\n\nsame with the assessee while deciding the issue. The assessee is also free\n\nto submit any evidence in this regard as per law. With the above\n\ndirections, the matter is remitted back to the file of the Assessing Officer\n\nfor fresh adjudication.\n\n\n12.     The next issue in this appeal of Revenue is with regard to order of\n\nCIT(A) deleting the disallowance of expenditure incurred for film Pissasu\n                                    :- 10 -:         ITA Nos.127 & 128/Chny/2019\n\n\n\namounting to Rs.1,07,56,041/-. For this, the Revenue has raised the\n\nfollowing grounds of appeal.\n\n\n      ''4.1. The learned CIT(A) erred in deleting the disallowance of Rs.\n      1,07,56,041/-, claimed by the assessee as expenditure incurred for the\n      film "Pissasu".\n\n      4.2. The Learned CIT(A) failed to appreciate that the assessee has not\n      established that the impugned expenditure has, in fact, been incurred by\n      him.\n\n      4.3. The Learned CIT(A) ought to have noted that in the film industry,\n      expenditure towards digital printing, poster pasting, etc., would be\n      incurred on the producer's account and the assessee-distributor would not\n      be fastened with such liability''.\n\n\n13.   Since we have adjudicated the issue of expenditure in regard to\n\nmovie Aranmanai, with the same finding and the facts being identical,\n\nwe restore this issue also back to the file of the AO exactly on the same\n\ndirection. Hence, this issue is set aside and remitted back to the file of the\n\nAssessing Officer. This issue of the Revenue is allowed for statistical\n\npurposes.\n\n14.   The next issue in this appeal of the Revenue is with regard to order\n\nof CIT(A) deleting the addition of attributable expenses such as boarding\n\nand lodging, commission paid, office building maintenance and travelling\n\namounting to Rs.9,46,269/-. For this, the Revenue has raised the following\n\ngrounds of appeal.\n                                    :- 11 -:          ITA Nos.127 & 128/Chny/2019\n\n\n\n      ''5.1. The Learned CIT(A) erred in deleting the addition of Rs.9,46,269/-,\n      attributable to expenses, such as, boarding & lodging, commission paid,\n      office building maintenance and travelling.\n\n      5.2. The Learned CIT(A) failed to appreciate that the assessee did not\n      produce any bills / vouchers to substantiate the expenditure and iIn the\n      absence of bills / vouchers, the only inference could be that the impugned\n      expenditure has not at all been incurred by the assessee.\n\n      5.3. The Learned CIT(A) ought to have noted that the burden of proof lies\n      on the assessee to establish the genuineness of expenditure as well as\n      that the expenditure has been incurred for business purposes.\n\n      5.4. Having regard to the Hon'ble Supreme Court's decision in the case of\n      CIT v. Calcutta Agency Ltd. (19 ITR 191) to the effect that the burden of\n      proving that an amount contended to be an expenditure, falls under\n      section 37 (1), is on the assessee''.\n\n\n15.    Brief facts of the case are that assessee claimed expenditure under\n\nthe following heads:-\n\n1. Boarding and Lodging Rs.2,63,518/-\n\n2. Commission paid Rs.15,00,000/-\n\n3. Office building maintenance Rs.11,63,000/-\n\n4. Travelling Rs.8,58,559/-\n\nTotaling Rs.37,85,077/-\n\nThe Assessing Officer during the course of assessment proceedings\n\nrequired the assessee to submit bills and vouchers in support of these\n\nexpenditure claimed. But assessee could not produce the same and hence\n\nconsidering the nature of expenditure, the Assessing Officer restricted the\n\ndisallowance of expenditure at 25%. Aggrieved assessee filed an appeal\n\nbefore the CIT(A).\n                                   :- 12 -:         ITA Nos.127 & 128/Chny/2019\n\n\n\n16.    The CIT(A) deleted the addition by observing at para 7.1 as under:-\n\n      ''7.1. In respect of addition of Rs.9,46,269/-, the AR for the\n      appellant has provided the ledger account copy for the\n      expenses incurred under the head (i) Boarding & Lodging\n      (ii) Commission paid (iii) Office Building Maintenance & (iv)\n      Travelling. On perusal of the same, it is seen that, all the\n      above expenses have been made through banking channel.\n      Hence, the addition made on account of the said\n      expenditures is directed to be deleted. Accordingly, this\n      ground of appeal is allowed''.\n\n\nAggrieved, the Revenue is in appeal before us.\n\n\n17. We have heard the rival submissions and perused the material\n\navailable on record. We noted that this expenditure is neither denied by\n\nthe AO nor the CIT(A). Even now before us, the Revenue has pointed out\n\nthat this expenditure is only normal expenditure but in the absence of any\n\nbills and vouchers, the AO has rightly estimated at 25% which is not very\n\nhigh. In the absence of evidence, we restrict the disallowance at 10% and\n\ndirect the AO accordingly. This ground of the Revenue is partly allowed.\n\n\n\n18.   The last issue raised by the Revenue in this appeal is with regard to\n\norder of the ld. CIT(A) directing the AO to allow carry forward loss claimed\n\nin the return of income filed u/s.153A of the Act. For this, the Revenue has\n\nraised the following grounds of appeal.\n                                     :- 13 -:          ITA Nos.127 & 128/Chny/2019\n\n\n\n      '6.1. The Learned CIT(A) erred in holding that the loss claimed in the\n      return of income u/s.153A is to be carried forward, by observing that the\n      return of income filed in response to notice u/s.153A is treated as filed\n      u/s.139(1) of the I.T. Act, 1961.\n\n      6.2. The Learned CIT(A) failed to appreciate that in the case of CIT v. Sun\n      Engineering Works (P) Ltd. (198 ITR 297) and Chettinad Corporation P.\n      Ltd. v. CIT (200 ITR 320), the Hon'ble Supreme Court has held that\n      reopening is only for the benefit of revenue and that assessments made\n      u/s.153A being in the nature of reassessment proceedings, the said\n      Hon'ble Supreme Court's decisions apply to return of income filed\n      u/s.153A too.\n\n      6.3. The Learned CIT(A) ought to have noted that in corporate cases, the\n      accounts have to be adopted in the Annual General Body meeting which\n      cannot be changed at the whims of the assessee and that a fresh claim,\n      such as a loss, cannot be claimed in the return of income filed in response\n      to notice u/s.153A of the Act''.\n\n\n19.   The brief facts of the case are that assessee filed its return of\n\nincome in response to notice u/s.153A of the Act on 05.09.2017 for the\n\nrelevant assessment year 2015-2016. A notice u/s.153A of the Act was\n\nissued by the AO based on seized material found during the course of\n\nsearch in the business and residential premises of the assessee. The\n\nassessee in its return of income declared total loss of Rs.4,27,80,214/-\n\nwhile filing return of income u/s.153A of the Act. The AO while computing\n\nincome of the assessee for the assessment year has disallowed the claim\n\nof loss but the CIT(A) after deleting the addition recomputed the loss and\n\nrevised the loss to be carried forward for future set-off for the reason that\n\nreturn filed by the assessee is in response to notice u/s.153A of the Act is\n\nto be treated as return filed u/s.139(1) of the Act and losses to be allowed\n\nto be carry forwarded. For this, the CIT(A) observed at para 8 as under:-\n                                       :- 14 -:          ITA Nos.127 & 128/Chny/2019\n\n\n\n\n         ''8. Based on the discussion made in this Appellate Order, the loss\n         for the year is recomputed as under:-\n\n\n      Particulars                                       Amount (in ₹)\n\n      Loss Declared in return of income                   4,26,71,136\n\n      Reduction in losses on account of                     91,00,000\n      unexplained investment in the movie\n      "Aranmanai' u/s.69B\n\n      Revised Losses available for C/f and future         3,35,71,136\n      set-off\n\n\n         Since the return of income filed in response to notice u/s.153A is treated\n         as filed u/s.139(1) the losses are allowed to be carried forward.\n\n\nAggrieved, the Revenue is in appeal before us.\n\n20.      Before us, the ld. CIT(DR) tried to make a distinction between the\n\nreturn filed in response to 153A and the return filed in response to notice\n\nu/s.148 of the IT Act. The ld. CIT(DR) distinguished             the Sections as\n\nunder:-\n\n\n Sec. 153A:\n\n         "(1) Notwithstanding anything contained in section 139, section\n         147, section 148, section 149, section 151 and section 153, int\n         eh case of a person where a search is initiated under section 132\n         or books of account, other documents or any assets are\n         requisitioned under section 132A after the 31st day of May,\n         2003, the Assessing Officer shall----\n\n         (a) Issue notice to such person requiring him to furnish within\n         such period, as may be specified in the notice, the return of\n         income in respect of each assessment year falling within six\n                                   :- 15 -:        ITA Nos.127 & 128/Chny/2019\n\n\n\n      assessment years (and for the relevant assessment year or\n      years) referred to in clause (b), in the prescribed form and\n      verified in the prescribed manner and setting forth such other\n      particulars as may be prescribed and the provisions of this Act\n      shall, so far as may be, apply accordingly as if such return were\n      a return required to be furnished under section 139; (Emphasis\n      Supplied)\n\n      Sec. 148 (As applicable for A Y 2015-16):\n\n      (1)   Before making the assessment, reassessment, or\n            recomputation under section 147, the Assessing Officer\n            shall serve on the assessee a notice requiring him to\n            furnish within such period as may be specified in the\n            notice, a return of his income or the income of any other\n            person in respect of which he is assessable under this Act\n            during the previous year corresponding to the relevant\n            assessment year, in the prescribed form and verified in the\n            prescribed manner and setting forth such other particulars\n            as may be prescribed; and the provisions of this Act shall,\n            so far as may be, apply accordingly as if such return were\n            a return required to be furnished under section 139".\n\nThe ld. CIR(DR) further submitted that return u/s.148/153A is to be\n\nconstrued as return filed u/s.139; only 'so far as may be' and not in toto.\n\nTherefore, in view of the grounds of appeal are reproduced with the above\n\nsubmissions and also noting the fact that the CIT(A) has suo-moto allowed\n\nthe loss which was not claimed by the assessee in his appeal. He placed\n\nreliance on the judgment of the Hon'ble Calcutta High Court in the case of\n\nShrikant Mohta v. CIT reported in 414 ITR 270. The CIT (DR) further\n\ncontended that    the assessee did not file the return within the time\n\nallowed in response to notice under section 153A of the Act. Therefore,\n\nthe assessee is not entitled to carry forward his loss. Hence, he prayed\n                                  :- 16 -:        ITA Nos.127 & 128/Chny/2019\n\n\n\nthat consequent   to the AY 2016-17, recomputed loss for AY 2015-16\n\ncannot be allowed to be set off with the income for the AY 2016-17.\n\n21. On the other hand, ld. Counsel for the assessee      had also placed\n\nreliance on the decision of Hon'ble Calcutta High Court in the case of\n\nShrikant Mohta (supra) wherein he argued that the Calcutta High Court\n\nhas answered the substantial question of law and the same is reproduced\n\nherein below:\n\n      (1)   Whether a loss return filed within the time specified in the\n            notice under Section 153A(1)(a) of the Income Tax Act,\n            1961 is required to be treated as a return filed in\n            accordance with the provisions of Section 139(3) for the\n            purpose of carrying forward of the loss in terms of Section\n            72 read with Section 80 of the Act;\n\n            For the purpose of carrying forward the loss in terms of\n            Section 72 read with Section 80 of the Act, in a case\n            where search operations have been conducted under\n            Section 132 of the Act, the time to file the return within\n            the meaning of Section 139(3) of the Act has to be\n            regarded as the reasonable time afforded by the\n            consequent notice under Section 153A (1)(a) of the Act.\n\n\n      (2) In a case where Section 153A of the Income Tax Act, 1961\n      applies, whether a return filed in response to the notice under\n      Section 153A(1)(a) is required to be treated as a return under\n      Section 139 and that any other return is of no consequence and\n      non est:-\n\n      When search operations are conducted under Section 132 of the\n      Act, the obligation of the assessee to file any return remains\n      suspended till such time that a notice is issued for such purpose\n      under Section 153A(1)(a) of the Act. If the return is filed by the\n      assessee within the reasonable time permitted by such notice\n      under Section 153A(1)(a) of the Act, such return would then be\n      deemed to have been filed within the time permitted under\n      Section 139 (1) of the Act for the benefit under Section 139(3)\n      of the Act to be availed of by the assessee.\n                                 :- 17 -:        ITA Nos.127 & 128/Chny/2019\n\n\n\n\nHe further submitted that, the entire matter was remanded back by\n\nthe Hon'ble Court by holding as follows:\n\n            17. In the light of the substantial questions of law being\n            answered herein, a definitive final order cannot be passed\n            without being sure of the date of issuance of the notice\n            under Section 153A(1)(a) of the Act and the time afforded\n            by such notice for the assessee to file the return. For such\n            purpose, the orders impugned passed by the Appellate\n            Tribunal require to be set aside and the matters remitted\n            back to the Tribunal for the Tribunal to ascertain the\n            details as to the date of the notice and the time afforded\n            to file the return and pass an order in the light of the\n            views expressed herein on the questions of law and it is\n            ordered accordingly.\n\nIn view of the above, it was argued that there was no statutory\n\nprescription of time limit for filing the return of income under Section\n\n153A(1)(a) of the Act and in this regard, the statute envisages\n\ndiscretion to entertain the return of income for computation purposes.\n\nOn the facts of the case, he submitted that         the return filed in\n\nresponse to notice under Section 153A of the Act on 05.09.2017 for\n\nAY 2015-16 and the said return of income was acted upon by the\n\nAssessing Officer in para 10 of the search assessment order. In the\n\nlight of the said admitted facts, the return of income filed being\n\nvalidated by the revenue in the search assessment order dated\n\n29.12.2017, the decision of the Calcutta High Court in reckoning such\n\nreturn as filed under Section 139(1) of the Act would support the\n\ndecision taken in the impugned order for the assessment year 2015-\n\n16 in granting such benefit. Accordingly, he pleaded for dismissing\n                                   :- 18 -:        ITA Nos.127 & 128/Chny/2019\n\n\n\nthe related grounds of appeal for the AY 2015-16 & pleads further for\n\ndismissal of the only ground taken by the revenue before the Bench\n\nfor the AY 2016-17 as a consequence of the stand taken for the AY\n\n2015-16 in the interest of justice.\n\n22.   We have heard the rival submissions and perused the material\n\navailable on record. Admittedly, in the present case, before us, a notice\n\nu/s.153A of the Act was issued on 24.01.2017 and return is to be filed\n\nwithin thirty days as per the notice. But the assessee filed belated return\n\nor return filed after expiry of time limit fixed by the Department i.e.\n\n05.09.2017. It means assessee filed return almost after seven months\n\nfrom the expiry of the time limit fixed by the Revenue. At this point, as\n\nrelied by the decision of Hon'ble Calcutta High Court in the case of\n\nShrikant Mohta (supra) by ld. CIT(DR), we note that Hon'ble Calcutta High\n\nCourt had held as under:;\n\n      ''To boot, the second proviso to Section 153A(1) insofar as it is\n      material for the present purpose, mandates that any\n      "assessment or reassessment relating to... the relevant\n      assessment year or years... pending on the date of initiation of\n      the search under Section 132. shall abate". [Para 14]\n\n      It goes without saying that since the search operations in this\n      case were initiated on 2-9-2004, it was no longer necessary for\n      this assessee to file his regular return by 31-10-2004\n      notwithstanding the mandate of Section 139(1) of the Act. The\n      obligation to file the return remained suspended, in view of the\n      clear opening words of Section 153A(1) till such time that a\n      notice was issued to him under clause (a) of such sub-section. If\n      such is the meaning of Section 153A(1), the operation of Section\n      139(3) qua the time available for filing a return in order to avail\n      of the benefit of carrying forward any loss stands extended till a\n      return is called for under Section 153A(1)(a) and such return is\n                            :- 19 -:        ITA Nos.127 & 128/Chny/2019\n\n\n\nfiled, provided the return is filed within the time indicated in the\nrelevant notice under Section 153A(1)(a) of the Act. There can\nbe no dispute to such being the effect of Section 153A(1)(a).\n[Para 15]\n\nUnfortunately, the notice issued under Section 153A(1)(a) is not\navailable in the records relied upon by the parties nor is there\nany reference to the date of such notice in any of the orders\nappended to the papers. Indeed, the time permitted by the\nrelevant notice under Section 153A(1)(a) for the assessee to file\nthe return is also not available. As recorded above, it is the\nsubmission of the assessee that such notice was received by the\nassessee on 27-3-2006 and it afforded a month's time to the\nassessee to file the assessee's return and the assessee's return\nfor the assessment year 2004-05 was filed on 26-4-2006. The\ndate when the return was filed, however, is verifiable from the\norders available. [Para 16]\n\nThus, a definitive final order cannot be passed without being\nsure of the date of issuance of the notice under Section\n153A(1)(a) and the time afforded by such notice for the\nassessee to file the return. For such purpose, the orders\nimpugned passed by the Tribunal requires to be set aside and\nthe matters remitted back to the Tribunal for the Tribunal to\nascertain the details as to the date of the notice and the time\nafforded to file the return and pass an order in the light of the\nviews expressed herein on the questions of law and it is ordered\naccordingly. [Para 17]\n\nFor the purpose of carrying forward the loss in terms of Section\n72 read with Section 80 in a case where search operations have\nbeen conducted under section 132 the time to file the return\nwithin the meaning of section 139(3) has to be regarded as the\nreasonable time afforded by the consequent notice under\nSection 153A(1)(a). [Para 18]\n\nWhen search operations are conducted under Section 132, the\nobligation of the assessee to file any return remains suspended\ntill such time that a notice is issued for such purpose under\nSection 153A(1)(a). If the return is filed by assessee within\nreasonable time permitted by such notice under Section\n153A(1)(a), such return would then be deemed to have been\nfiled within time permitted under section 139(1) for benefit\nunder Section 139(3) to be availed of by assessee. [Para 19]''\n                                   :- 20 -:         ITA Nos.127 & 128/Chny/2019\n\n\n\nWe noted that in this case before Calcutta High Court the return of income\n\nwas filed within the time allowed by revenue and not belatedly much after\n\nissuing notice u/s. 153A of the Act. But in the present case before us, the\n\nreturn of income in response to notice u/s. 153A of the Act was filed after\n\nseven months on 05.09.2017 as against notice issued on 24.01.2017. It\n\nmeans that the case laws Hon'ble Calcutta High Court in the case of\n\nShrikant Mohta (supra) is factualy distinguishable and not applicable to\n\nthe present case. Hence, the CIT(A) has erred in allowing set off of loss.\n\nIn view of the above, we allow this issue raised by the Revenue.\n\n\n23.   Now, we take up ITA No.128/CHNY/2019 for the assessment year\n\n2016-2017 for adjudication.\n\n24    As regards to appeal of the Revenue, the only issue raised is with\n\nregard to claim of assessee to carry forward of loss quantified at\n\nRs.3,35,71,136/- not to be carried forward for the assessment year 2016-\n\n2017. For this, the Revenue has raised the following grounds of appeal.\n\n      ''2.1. The learned CIT(A) erred in holding that the carry\n      forward of loss, quantified at Rs.3,35,71,136/-, by the\n      learned CIT(A) for the assessment year 2015-16 is to be\n      set-off against the gross total income for the assessment\n      year 2016-17.\n\n      2.2 It is submitted that appeal has been preferred for the\n      assessment year 2015-16 on the issue of carry forward of\n      loss and, as a corollary, appeal has been preferred on the\n      set-off of such carry forward loss, for the assessment year\n      2016-17''\n                                      :- 21 -:      ITA Nos.127 & 128/Chny/2019\n\n\n\n 25.      Since, we have adjudicated the issue in appeal No.127/CHNY/2019\n\n for the assessment year 2015- 2016 and hold that the loss cannot be carry\n\n forwarded, the order of the CIT(A) directing the AO to allow carry forward\n\n of loss of Rs.3,35,71,136/- have become redundant since there is no carry\n\n forward loss available to the assessee in this assessment year and hence\n\n this appeal of the Revenue stands allowed.\n\n 26.    In the result, the appeal filed by the Revenue in ITA No.\n\n 127/CHNY/2019 for the assessment year 2015-2016 is partly allowed for\n\n statistical purpose and the appeal of the Revenue in ITA No.\n\n 128/CHNY/2019 for the assessment year 2016-2017 stands allowed.\n\n\n       Order pronounced on 29th      day of December, 2023 at Chennai.\n\n\n                  Sd/-                                   Sd/-\n            (मंजुनाथ. जी)                           (महावीर िसंह )\n         (MANJUNATHA.G)                           (MAHAVIR SINGH)\n ले खा सद /ACCOUNTANT MEMBER                    उपा   /VICE PRESIDENT\nचे ई/Chennai\n दनांक/Dated:29.12.2023.\n KV\n आदेश क     ितिलिप अ ेिषत/Copy to:\n\n1. अपीलाथ /Appellant 2. यथ /Respondent 3.. आयकर आयु /CIT     4. िवभागीय\n    ितिनिध/ DR 5. गाड फाईल/GF