Deputy Commissioner of Income-tax, V. Kirloskar Ferrous Industries Ltd., Pune

ITA 1644/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2462 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 29-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O A MAO
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , . ! , ' , # BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO, AM . / ITA NO.1644/PUN/2016 $ % % / ASSESSMENT YEAR : 2007-08 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-14, PUNE. ....... / APPELLANT $ / V/S. KIRLOSKAR FERROUS INDUSTRIES LIMITED., LAXMANRAO KIRLOSKAR ROAD, KHADKI, PUNE-411 003 PAN : AAACK7297E / RESPONDENT APPELLANT BY : SHRI O. A. MAO RESPONDENT BY : SHRI C.H. NANIWADEKAR / DATE OF HEARING : 27.08.2018 / DATE OF PRONOUNCEMENT : 28.08.2018 & / ORDER PER SUSHMA CHOWLA, JM THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME TAX (APPEALS)-7, PUNE DATED 02.05.2016 RELATING TO ASSESSMENT YEAR 2007-08 AGAINST ORDER PASSED UNDER SECTION 154 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). 2 ITA NO.1644/PUN/2016 A.Y.2007-08 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1 . WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) WAS JUSTIFIED IN DIRECTING THE A.O. TO AL LOW SET OFF OF UNABSORBED DEPRECIATION RELATING TO A.Y. 1998-99 TO 2001-2002 AGAINST THE INCOME OF A.Y. 2007-08 WHEN AS PER THE PROVISIO NS OF SEC.32(2) OF THE I.T.ACT, AS APPLICABLE FOR THE A.Y.1999-2000 UN ABSORBED DEPRECIATION CANNOT BE SET OFF FOR A PERIOD OF MORE THAN EIGHT A SSESSMENT YEARS SUCCEEDING THE ASSESSMENT YEAR IN WHICH THE ALLOWAN CE WAS FIRST COMPUTED? 2. 'WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN THE LAW, THE LD.CIT(A) WAS JUSTIFIED IN NOT APPLYING THE RAT IO LAID DOWN IN THE DECISION OF THE LD. ITAT, SPECIAL BENCH 'E' MUMBAI IN THE CASE OF M/S. TIMES GUARANTEE LIMITED IN ITA NOS.4917 & 4918/MUM/ 2008, THE PRESENT ASSESSEE'S CASE. 3. FOR THE FACTS AND SUCH OTHER REASONS AS MAY BE U RGED AT THE TIME OF HEARING, THE ORDER OF THE LD. COMMISSIONER OF (APPE ALS), PUNE MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE RESTOR ED. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTE R ANY OF THE ABOVE GROUNDS OF APPEAL. 3. THE LD. AR FOR THE ASSESSEE POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEAR 2008-09. HE ALSO POINTED OUT THAT SIMILAR GROUNDS OF APPEAL AS IN THE PRESENT APPEAL WERE RAI SED BY REVENUE IN ASSESSMENT YEAR 2008-09. 4. THE LD. DR FOR THE REVENUE HAS PLACED RELIANCE O N THE ORDER OF ASSESSING OFFICER. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE RAISED IN THE PRESENT APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT(A) IN DIRECTING THE ASSESSING OFFICER TO ALLOW SET OFF OF UNABSORBED DEPRECIATION RELATING TO ASSESSMENT YEARS 1998-99 TO 2001-02, E SPECIALLY IN VIEW OF THE PROVISION OF SECTION 32(2) OF THE ACT. 3 ITA NO.1644/PUN/2016 A.Y.2007-08 6. BRIEFLY IN THE FACTS OF THE CASE, THE ASSESSEE H AD FILED RETURN OF INCOME ON 30.10.2007 DECLARING TOTAL INCOME OF NIL AS PER THE REGULAR PROVISIONS AND RS.33,47,76,972/- AS PER THE PROVISIONS OF MAT. TH E INCOME OF THE ASSESSEE COMPANY WAS ASSESSED UNDER SECTION 143(3) ON 23.12. 2009 AT RS.66,39,73,544/-. THE ASSESSING OFFICER ISSUED NOT ICE UNDER SECTION 154 OF THE ACT FOR RECTIFYING THE ALLOWANCE OF RS.73,51,42,45 5/- CLAIMED AS UNABSORBED DEPRECIATION CARRIED FORWARD BY THE ASSESSEE OF WHI CH RS.13,92,90,774/- CARRIED FORWARD AS UNABSORBED DEPRECIATION WAS FROM ASSESS MENT YEAR 1999-2000. THE ASSESSEE FILED EXPLANATION WHICH WAS REJECTED B Y THE ASSESSING OFFICER AND SUM OF RS.13,92,90,774/- WAS ADDED TO THE TOTAL INC OME OF THE ASSESSEE. 7. THE CIT(A) RELYING ON THE ORDER OF TRIBUNAL IN A SSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 ALLOWED THE SET OFF OF UNAB SORBED DEPRECIATION PERTAINING TO ASSESSMENT YEAR 1999-2000 WHICH WAS D ISALLOWED BY THE ASSESSING OFFICER TO BE CARRIED FORWARD ON THE GROU ND THAT UNABSORBED DEPRECIATION PERTAINING TO ASSESSMENT YEARS 1998-99 TO 2001-02 COULD BE CARRIED FORWARD FOR EIGHT ASSESSMENT YEARS ONLY. T HE TRIBUNAL IN ITA NO.911/PN/2013 VIDE ORDER DATED 27.11.2014 HAD ALLO WED THE CLAIM OF THE ASSESSEE. 8. WE FIND THAT THE ISSUE RAISED IN THE PRESENT APP EAL IS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE RELATI NG TO ASSESSMENT YEAR 2008- 09 (SUPRA.) WHEREIN THE TRIBUNAL HAD RELIED ON THE RATIO LAID DOWN BY THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF GENERAL MOTORS IN DIA PVT. LTD. VS. DCIT VIDE SPECIAL CIVIL APPLICATION NO. 1773/2012 ORDER DATED 27.08.2012. THE TRIBUNAL VIDE PARA 17 AT PAGE 14 TO 17 OF THE ORDER HAD ALLO WED THE CLAIM OF THE ASSESSEE BY HOLDING THAT THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF HON'BLE GUJARAT HIGH COURT AND THE DECI SION OF SPECIAL BENCH OF THE 4 ITA NO.1644/PUN/2016 A.Y.2007-08 TRIBUNAL IN THE CASE OF M/S.TIMES GUARANTEE LIMITED VS. DCIT REPORTED IN 131 TTJ 257 ( MUM-SB) HAS BEEN OVERRULED. THE RELEVANT FINDINGS OF THE ORDER OF TRIBUNAL ARE REPRODUCED BY THE CIT(A) AT PAGE 5 TO 8 OF THE APPELLATE ORDER, WHICH ARE BEING REFERRED TO, BUT NOT BEING REPRODUC ED FOR THE SAKE OF BREVITY. THE ISSUE RAISED IN THE PRESENT APPEAL STANDS SQUAR ELY COVERED IN FAVOUR OF ASSESSEE BY THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 AND FOLLOWING THE SAME PARITY OF THE REASON ING , WE UPHOLD THE ORDER OF CIT(A) AND DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED ON THIS 28TH DAY OF AUGUST, 2018. SD/- SD/- ( D. KARUNAKARA RAO) (SUSHMA CHOWLA) /ACCOUNTANT MEMBER /JUDICIAL MEMBER / PUNE; ! / DATED : 28 TH AUGUST, 2018 SB & ' ()*+ ,+) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-7, PUNE. 4. THE CIT-6, PUNE. 5. '#$ %& , ' %& , ()* , / DR, ITAT, B BENCH, PUNE. 6. $+, -. / GUARD FILE. // TRUE COPY // '/ / BY ORDER, 0 %* /PRIVATE SECRETARY ' %& , / ITAT, PUNE.