KOTHARI INTERNATIONAL TRADING LIMITED AND ORS. Vs. THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE -4(2)

JUDGEMENT

(1.) The above Tax Case Appeals are filed against the order of the Income Tax Appellate Tribunal, "A" Bench, Chennai, dated 6th day of September, 2017 in ITA.No.352/Mds/17 and ITA.No.353/Mds/2017.

(2.) The appellants/assessees are M/s.Kothari International Trading Ltd., in TCA.133 of 2019 and M/s.Kothari Biotech Ltd., in TCA.135 of 2019. Both assessees filed the return of income for the Assessment Year 2004-05 on 29/10/2004 claiming a loss of Rs.3,62,12,799.00 in TCA.133/2019 and on 31/10/2004, claiming a loss of Rs.2,02,92,732.00 respectively. The return was processed u/s.143(1) of the Income Tax Act (hereinafter called as "Act"), which resulted in a refund of Rs.3,07,086.00 in the case of M/s.Kothari Biotech Limited. The case was selected for scrutiny as per norms and notice was issued u/s.143(2) and notice calling for certain information was also sent. After furnishing of information by the assessee, Assessment order was passed on 30/08/2006 in both assessees case. As the assessment completed was considered to be erroneous and prejudicial to the interests of revenue, notice under Sec. 263 was issued to the assessee on 15/1/2009. The reasons for issue of notice u/s.263 are as under:- Insofar as TCA.133 of 2019 - M/s.Kothari International Trading Limited is concerned, the reasons are :-

(3.) In response to notice, assessee/M/s.Kothari International Trading Ltd., given their reply. According to the assessee, the assessee has written back in profit and loss account as relief on one time settlement of debts, comprising principal and interest. The assessee/M/s.Kothari Biotech charged the preoperative expenses like interest, exchange fluctuation losses to the profits and loss account.