ITA No.1969/Chny/2025, Assessment Years: 2014-15 CO No.86/Chny/2025, Assessment Years: 2014-15

Parties Involved

Facts Summary

The respondent assessee, M/s.Sri Lakshmi Electro Smelters Private Limited, is a company incorporated under the Companies Act 1956, engaged in the manufacture and sale of Ferro Alloys. The return of income for Assessment Year 2014-15 was filed on 18.12.2015 disclosing an income of Rs.19,850/-. The assessment was completed by the Assistant Commissioner of Income Tax, Corporate Circle-2, Coimbatore, at a total income of Rs.1,25,19,850/- vide order dated 10.10.2016. The AO made an addition of outstanding sundry creditors of Rs.1,25,00,000/- being the amount of advance received against the supply of machinery from M/s.Cethar Vessels Private Limited, Trichy. The AO also denied the claim for set off of unabsorbed depreciation of Rs.2,00,06,636/- and carry forward business loss of Rs.14,87,948/-.…

Legal Issues

• 1. Whether the AO ought to have allowed set off of unabsorbed depreciation loss against the business income determined.
• 2. Whether the addition made on account of disbelieving the sundry creditors on receipt of advance against the supply of machinery is valid under section 41(1) or section 51(1) of the Act.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

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