Joint Commissioner of Income Tax, (OSD), Circle-4(1)(1), Bangaluru V. M/s. Kurlon Limited, Bangaluru

ITA 1135/BANG/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1416 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 06-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Unabsorbed depreciation; TDS
• Section: 43B; 201; 13; 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH ES : B , BANGALORE BEFORE SHRI A.K.GARODIA, ACCOUNTANT MEMBER AND S MT.BEENA PILLAI , JUDICAL MEMBER ITA N O .11 35 (BANG) /2018 (ASSESSMENT Y E AR : 201 1 - 1 2) THE JOINT COMMISSIONER OF INCOME TAX (OSD) , CIRCLE - 4 (1)(1), II FLOOR, BMTC DEPOT. BUILDING, KORAMANGALA BANGALORE APPELLANT VS M/S KURLON LTD., NO.301 - 303,NORTH BLOCK, III FLOOR, MANIPAL CENTRE, DICKENSON ROAD, BANGALORE PAN NO.AABCK2150K RESPONDENT APPELLANT BY : MS. NEE RA MALHOTRA, CIT - DR RE VENUE BY : S HRI CUDDAPAH RAMESH, C A DATE OF HEARING : 11 - 12 - 2019 DATE OF PRONOUNCEMENT : 13 - 12 - 2019 O R D E R PER BEENA PILLAI, JUDICIAL MEMBER : THE PRESENT APPEAL HAS BEEN FILED BY REVENUE AGAINST ORDER DATED 28/12/17 PASSED BY LD. CIT (A) - 4, BANGALORE FOR ASSESSMENT YEAR 2011 - 12 ON FOLLOWING GROUNDS OF APPEAL: ITA NO11 35 (B)/2018 2 1. THE ORDER OF THE LD.CIT(A) IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE LD.CIT(A) IS RIGHT IN ALLOWING THE APPEAL OF THE ASSESSEE RELYING ON THE DECISION IN WHICH NO UNIFORMITY IN THE CASE GIVE N BY THE HONBLE HIGH COURT WHICH MEANS THE FACT AND CIRCUMSTANCES OF THE CASE ARE COMPLETELY DIFFERENCE FROM THE CASE AT HAND. 3. ON THE FACTS OF THE CASE, WHETHER THE LD.CIT(A) IS RIGHT IN ALLOWING THE APPEAL OF THE ASSESSEE AGAINST THE PROVISIONS ENACTED I N FINANCE ACT 1988 - 89, IN WHICH THE LIMITATION FOR CARRY FORWARD O THE DEPRECIATION WAS RESTRICTED TO 8 YEARS. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE CIT(A) IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND THAT OF THE AO MAY BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED. 2. BRIEF FACTS OF THE CASE ARE AS UNDER: ASSESSEE IS A COMPANY ENGAGED IN BUSINESS OF MAN UFACTURING, TRADING AND DISTRIBUTION OF RUBBERIZED COIR MATTRESSES, FURNITURE, ALLIED PRODUCES AND E - COMMERCE. IT FILED I TS RETURN OF INCOME ON 30/09/11, DECLARING TOTAL INCOME OF RS.25,47,61,858/ - FOR YEAR UNDER CONSIDERATION. LD.AO COMPLETED ASSESSMENT UNDER SECTION 143 (3) MAKING FOLLOWING ADDITIONS: DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO PF/ESI OF RS.10,80,421/ - UNDER SECTION 43B DISALLOWANCE OF EXTRA SET OFF OF UNABSORBED BUSINESS/DEPRECIATION LOSS OF RS.6,58,41,440/ - . ITA NO11 35 (B)/2018 3 3. AGGRIEVED BY ADDITIONS MA DE BY LD.AO ASSESSEE PREFERRED APPEAL BEFORE THE LD.CIT (A) , WHO PARTLY DELETED ADDITIONS . 4. AGGRIEVED BY ORDER PASSED BY LD.CIT (A) REVENUE IS IN APPEAL BEFORE US NOW. 5. LD.CI T DR SUBMITTED THAT IN VIEW OF AMENDMENTS MADE TO PROVISIONS OF SECTION 32 OF THE ACT, UNABSORBED DEPRECIATION DURING THE PERIOD FROM 1997 - 98 TO 2001 - 02 COULD BE ALLOWED TO BE CARRIED FORWARD AND SET OFF ONLY UP TO 8 SUBSEQUENT ASSESSMENT YEARS. SHE SUBMITTED THAT ASSESSEE FOR YEAR UNDER CONSIDERATION HAS CARRY FORWARD D AND SET OFF OF UNABSORBED DEPRECIATION MORE THAN 8 YEARS FROM ASSESSMENT YEAR 2001 - 02. 5.1 SHE PLACED RELIANCE UPON VIEW TAKEN BY LD.AO. 5.2 ON THE CONTRARY, LD.AR PLACED RELIANCE UPON OBSERVATIONS OF LD. CIT (A). 6. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORDS PLACED BEFORE US. IT IS OBSERVED THAT T HE AMENDMENT RELIED UPON BY LD. AO HAS BEEN SUBSTITUTED BY F INANCE A CT 2001 W.E.F. 01/04/02 , WHEREIN NEW SUBSECTION (2) OF SECTION 32 REINSTATED THE PROVISIONS , AS IT STOOD IN ASSESSMENT YEAR 1996 - 97. IT HAS BEEN OBSERVED THAT RESTRICTI ONS IMPOSED BY F INANCE A CT (NO.2) ACT , 1996 IN THE MATTER OF SET O F F OF UNABSORBED DEPRECIAT ION HAS BEEN DISPENSED WITH AND ORIGINAL PROVISION HAS BEEN RESTORED. RELIANCE IS ALSO B EEN PLACED ON THE DECISION OF ON COORDINATE BENCH OF THIS T RIBUNAL IN CASE OF AS GRAN IT PRIVATE LIMITED VS IT O IN ITA NO. 58 AND 59/B/2012 FOR ASSESSMENT YEAR 2005 - 06 AND 2006 - 07 , WHEREIN THIS TRIBUNAL RELIED UPON DECISION OF JURISDICTIONAL H IGH COURT IN CASE OF KARNATAKA C O - O PERATIVE M ILK P RODUCERS FEDERATION LTD VS DCIT REPORTED IN (2011) ITA NO11 35 (B)/2018 4 53 DT ARE (KAR) 81 AND VARIOUS OTHER DECISIONS AS HAS BEEN PLACED IN THE PAPER BOOK FILED BEFORE US WHEREIN IT WAS HELD THAT WHERE EVER UNABSORBED DEPRECIATION WAS NOT ALLOWED TO BE SET OFF AGAINST THE PROFIT ARISING AFTER THE PERIOD OF 8 YEARS SHOULD BE A GAME CONSIDERED TO BE SET OFF AFTER AMENDMENT. IT WAS OBSERVED THAT WHEN QUANTUM OF UNABSORBED DEPRECIATION IS COMPUTED AFTER THE AMENDMENT, WHATEVER BALANCE OF UNABSO RBED DEPRECIATION IS AVAILABLE TO THE CREDIT OF ASSESSEE MUST BE DETERMINED AS UNABSORBED DEPRECIATION ELIGIBLE FOR CARRY FORWARD AND SET O FF. HONBLE C OURT HELD THAT THE INTERREGNUM RESTRICTION OF LIMITING CLAIM OF EIGHT - YE AR PERIOD DOES NOT TAKE AWAY RIGHT OF AN ASSESSEE TO CLAIM BALANCE OF UNABSORBED DEPRECIATION FOR EVER. THUS THE LEGISLATURE HAS RESORTED TO ORIGINAL PROVISIONS BY AMENDMENT BROUGHT IN BY F INANCE A CT 200 1 , THEREBY RESORTING TO OLD POSITION , WHIC H ALLOWS SET OFF OF UNABSORBED DEPRECIA TION AND RESTRICTIVE PERIOD OF 8 YEARS FOR CLAIMING SET O F F HAS BEEN DELETED , THEREBY EXTENDING THE BENEFIT AGAINST PROFIT AND GAINS OF SUBSEQUENT YEARS WITHOUT ANY BAR. 7. WE ARE THEREFORE , IN TOTAL AGREEMENT WITH THE VIEW , ADOPTED BY LD. CIT (A) AND THE SAME IS UPHELD. ACCORDINGLY THE GROUNDS RAISED BY REVENUE STANDS DISMISSED. IN THE RESULT APPEAL FILED BY REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 - 12 - 2019. S D / - S D / - ( A.K.GARODIA ) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 - 1 - 2019 *AM ITA NO11 35 (B)/2018 5 COPY OF THE ORDER FORWARDED TO: 1.APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5. DR 6. ITO (TDS) 7.GUARD FILE BY ORDER ASSTT.REGISTRAR