M/s. Bodal Chemical Ltd., Ahmedabad V. The ACIT.,A'bad Circle-1, Ahmedabad

CO 338/AHD/2010

• Counselvise Citation: [2011] 122 COUNSELVISE.COM (IT) 6090 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 month(s) 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 22-12-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIVEK N CHAVDA
• Assessee Lawyers: KARTAR SINGH
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 115JB

Judgement Text

ITA NO.3174/A HD/2010 & C.O..NO.338/A HD/2010. ASSESSMENT YEAR 2006-07. 1 IN THE INCOME TAX APPELLATE TRIBUNAL - A BENCH, A HMEDABAD. (BEFORE SHRI MUKUL KUMAR SHRAWAT & SHRI A. K. GARODIA) I.T.A.NO. 3174/AHD/2010 (ASSESSMENT YEAR: 2006 -2007) THE ASSISTANT COMMISSIONER OF INCOME TAX, AHMEDABAD CIRCLE-1, 3 RD FLOOR, JITENDRA CHAMBERS, R.B.I. LANE, ASHRAM ROAD, AHMEDABAD. (APPELLANT) VS. M/S. BODAL CHEMICALS LTD., PLOT NO.123 & 124, PHASE-I, G/I.D.C., VATVA, AHMEDABAD. (RESPONDENT) C.O. NO. 338/AHD/2010 (ARISING OUT OF ITA NO.317 4/AHD/2010) (ASSESSMENT YEAR: 2006 -2007) M/S. BODAL CHEMICALS LTD., PLOT NO.123 & 124, PHASE-I, G/I.D.C., VATVA, AHMEDABAD. (APPELLANT) VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, AHMEDABAD CIRCLE-1, 3 RD FLOOR, JITENDRA CHAMBERS, R.B.I. LANE, ASHRAM ROAD, AHMEDABAD (RESPONDENT) PAN: AAACD 5352 M APPELLANT BY : SHRI KARTAR SINGH, CIT (DR) RESPONDENT BY : SHRI VIVEK N. CHAVDA. ( )/ ORDER PER: SHRI A.K. GARODIA, A.M. THIS APPEAL IS FILED BY THE REVENUE AND THE CROSS OBJECTION IS FILED BY THE ASSESSEE. THESE ARE DIRECTED AGAINST THE ORDER OF LD. CIT (A)-VI, AHMEDABAD DATED 3-9-2010 FOR ASSESSMENT YEAR 2006-0 7. ITA NO.3174/A HD/2010 & C.O..NO.338/A HD/2010. ASSESSMENT YEAR 2006-07. 2 2. FIRST WE TAKE UP THE APPEAL FILED BY THE REVENUE . GROUNDS RAISED BY THE REVENUE ARE AS UNDER:- 1. THE CIT(A) ERRED IN LAW AND ON FACTS IN DIRECTI NG THE AO TO CONSIDER THE UNABSORBED DEPRECIATION AND BUSINESS L OSSES TOGETHER FOR ALL THE YEARS FOR COMPUTING BOOK PROFIT U/S. 115JB. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE CIT (A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSES SING OFFICER SINCE THE ASSESSEE HAS FAILED TO DISCLOSE HIS TRUE INCOME . 3. IT IS SUBMITTED BY THE LD. D.R. OF THE REVENUE T HAT THE CIT (A) HAS FOLLOWED TRIBUNAL DECISION RENDERED IN THE CASE OF AMLINE TEXTILES (P ) LTD. VS. I.T.O. REPORTED IN (209) 27 SOT 152 (MUMBAI) BU T THE DIRECTION GIVEN BY HIM IS NOT CLEAR AND HENCE THE DIRECTION GIVEN BY L D. CIT (A) TO THE A.O. SHOULD BE MODIFIED. THE LD. A.R. OF THE ASSESSEE SU PPORTED THE ORDER OF THE CIT (A) ON THIS ISSUE. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF THE AUTH ORITIES BELOW AND THE TRIBUNAL DECISION IN THE CASE OF AMLINE TEXTILES (P ) LTD. (SUPRA). WE FIND THAT A.O. HAS NOTED THE FIGURES OF BUSINESS LOSSES AND DEPRECIATION ON PAGE-2 OF THE ASSESSMENT ORDER. THE A.O. HAD NOTED THAT T HE ASSESSEE HAS CLAIMED CUMULATIVE FIGURES OF UNABSORBED DEPRECIATION AND B ROUGHT FORWARD BUSINESS LOSS WHICH EVER IS LESS INSTEAD OF COMPUTING THE LE AST OF THE TWO YEAR-WISE. AS PER THE ASSESSEE, BROUGHT FORWARD BUSINESS LOSS IS OF RS.3,56,51,941/- AND BROUGHT FORWARD UNABSORBED DEPRECIATION OF RS.4,83, 37,429/- AND HENCE, AS PER THE ASSESSEE, BROUGHT FORWARD BUSINESS LOSS OF RS.356.51 LAKHS BEING LOWER THAN BROUGHT FORWARD UNABSORBED DEPRECIATION SHOULD BE REDUCED FROM ITA NO.3174/A HD/2010 & C.O..NO.338/A HD/2010. ASSESSMENT YEAR 2006-07. 3 THE BOOK PROFIT TO BE COMPUTED U/S. 115JB. BUT THE A.O. WAS NOT SATISFIED. HE HAS RE-WORKED SUCH WORKING ON PAGE-3 OF THE ASSE SSMENT ORDER AND HAS WORKED OUT THAT WHEN YEAR-WISE FIGURE OF BUSINESS L OSS OR DEPRECIATION WHICH EVER IS LOWER IS TAKEN, THE ASSESSEE IS ELIGI BLE FOR DEDUCTION OF RS.213.32 LAKHS ONLY. WHEN THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT (A), THE LD. CIT (A) DIRECTED THE A.O. TO CONSI DER UNABSORBED DEPRECIATION AND BUSINESS LOSSES TOGETHER FOR ALL T HE YEARS FOR COMPUTING THE BOOK PROFIT U/S. 115JB AND WHILE GIVING DIRECTION T O THE A.O., THE LD. CIT(A) HAS FOLLOWED THE TRIBUNAL DECISION IN THE C ASE OF AMLINE TEXTILES (P) LTD.(SUPRA). AS PER THIS TRIBUNAL DECISION, AG GREGATE AMOUNT OF LOSS BROUGHT FORWARD OR UNABSORBED DEPRECIATION, WHICHEV ER IS LESS AS PER THE BOOKS OF ACCOUNT IS ALLOWABLE DEDUCTION IN COMPUTIN G THE BOOK PROFIT U/S. 115JB. WE FIND THAT THE DIRECTION GIVEN BY THE LD. CIT (A) IS SOMEWHAT CONFUSING AND HENCE, WE MODIFY THE DIRECTION GIVEN BY HIM AND DIRECT THE A.O. TO DECIDE THIS ISSUE IN LINE WITH THE TRIBUNAL DECISION RENDERED IN THE CASE OF ALMINE TEXTILES (P) LTD. (SUPRA).THE A.O. S HOULD CONSIDER AGGREGATE AMOUNT OF LOSSES BROUGHT FORWARD OR UNABSORBED DEPR ECIATION, WHICHEVER IS LESS AS PER THE BOOKS OF ACCOUNTS AND THE SAME SHOU LD BE ALLOWED AS DEDUCTION IN COMPUTING BOOK PROFIT U/S. 115JB. THIS GROUND OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES IN TERMS INDICA TED ABOVE. 5. IN THE RESULT APPEAL OF THE REVENUE STAND ALLOWE D FOR STATISTICAL PURPOSES. 6. NOW, WE TAKE UP THE CROSS OBJECTION FILED BY THE ASSESSEE. THE LD. A. R. OF THE ASSESSEE WITHDREW CROSS OBJECTION FILE D BY THE ASSESSEE AND HENCE, C.O. OF THE ASSESSEE IS DISMISSED AS WITHDRA WN. ITA NO.3174/A HD/2010 & C.O..NO.338/A HD/2010. ASSESSMENT YEAR 2006-07. 4 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES AND C.O. FILED BY THE ASSESSEE IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 30 - 06- 2011. SD/- SD/- (MUKUL KUMAR SHRAWAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. DATED: 30 - 6 - 2011. S.A.PATKI. COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)-VI, AHMEDABAD. 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD. ITA NO.3174/A HD/2010 & C.O..NO.338/A HD/2010. ASSESSMENT YEAR 2006-07. 5 S 1.DATE OF DICTATION 22 - 06 -2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 24 /06 / 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S 29 - 6 -2011. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 30 - 6 -2011 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 30 - 6 -2011 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30 - 6 -2011. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..