KARLE INTERNATIONAL PRIVATE LTD Vs. ASSISTANT COMMISSIONER OF INCOME-TAX RESERVE BANK OF INDIA BANGALORE

JUDGEMENT

(1.) This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the assessee. The subject matter of the appeal pertains to the Assessment year 2008-09. The appeal was admitted by a bench of this Court vide order dated 23.12.2004 on the following substantial question of law:

(2.) Facts leading to filing of this appeal briefly stated are that the assessee is a private limited company engaged in the business of manufacture and export of readymade garments. The assessee for the Assessment year 2008-09 filed the return of income declaring total income of Rs.12,89,760/-. The assessee has three units and showed profit and loss from Units I to III. The assessee had set off losses of the units against the profits of the unit making profits and offered the balance as income tax payable under the head 'income from business' at Rs.12,89,762/- which was declared in the return of income. The Assessing Officer by order dated 31.12.2010 inter alia held that losses of export oriented units cannot be allowed to set off against the profits of Unit No.I and added back the losses of export oriented unit i.e., Rs.6,65,23,391/- against the income of profit making unit and determined the total income of the assessee at Rs.6,78,13,151/- and created a demand of Rs.2,99,27,080/-.

(3.) The assessee challenged the order passed by the Assessing Officer in an appeal before the Commissioner of Income Tax (Appeals), which was dismissed by an order dated 02.02.2012. Being aggrieved, the assessee filed an appeal before Income Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal', for short). The Tribunal by an order dated 12.10.2012 dismissed the appeal preferred by the assessee and upheld the order of the Commissioner of Income Tax (Appeals). In the aforesaid factual background, the assessee has filed this appeal.