Appeal Details
Counselvise Citation
[2019] 118 COUNSELVISE.COM (IT) 0654 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 6 month(s) 3 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-03-2019
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Assessment Year
2014-2015
Appeal Filed On
25-09-2017
Judgement Text
, B - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER &SMT. MADHUMITA ROY, JUDICIAL MEMBER . ITA NO. 2121/AHD/2017 / ASSTT. YEAR: 2014-15 DCIT BK CIRCLE, PALANPUR VS. BANASKANTHA DISTRICT OIL SEEDS GROWERS CO- OPERATIVE UNION LTD. PALANPUR DEESA HIGHWAY, AT & POST:- BADARPURA TALUKA, PLANPUR ROAD, PALANPUR- 385001 PAN:AAA AS1 902 L / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI SANTOSH KASHANI, SR. DR REVENUE BY : SHRI NILESH THAKKAR, AR !'/ DATE OF HEARING : 13/02/2019 #$% !'/ DATE OF PRONOUNCEMENT: 28/03/2019 &'/ O R D E R PER MADHUMITA ROY- JM : THE INSTANT APPEAL PREFERRED BY THE REVENUE IS AGAI NST THE ORDER DATED. 24.07.2017 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-4, AHMEDABAD ARISING OUT OF THE ORDER DATED 26.11.2016 PASSED BY THE DCIT, BANASKANTHA CIRCLE, PALANPUR U/S. 143(3) OF THE ACT WHEREBY AND WHERE U NDER THE DISALLOWANCE OF DEPRECIATION OF RS. 38,01,74,420/- U/S. 32 HAS BEEN DELETED. 2. THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 22 .11.2014 DECLARING TOTAL INCOME OF RS. NIL. UPON COMPULSORY SCRUTINY NOTICE U/S. 143(2) OF THE ACT DATED. 31.08.2015 FOLLOWED BY A QUESTIONNAIRE WAS SERVED U PON THE ASSESSEE. IT APPEARS FROM THE RECORD THAT DURING THE ASSESSMENT PROCEEDI NGS IT WAS FOUND THAT THE ITA NO. 2121/AHD/2017 A.Y. 2014-15 2 ASSESSEE HAS BROUGHT FORWARD DEPRECIATION OF RS. 38 ,01,74,402/- PERTAINING TO ASSESSMENT YEAR 2001-02. THE LD. AO WAS OF THE VIE W THAT THE ASSESSEE SINCE COMPLETED TIME LIMIT FOR SET OFF OF BUSINESS LOSS A ND UNABSORBED DEPRECIATION IN 2009-10, THE SAME CANNOT BE SET OFF AGAINST THE INC OME FOR ASSESSMENT YEAR 2014- 15. IT WAS FURTHER OBSERVED THAT SEC. 32(2) DOES N OT PERMIT DEPRECIATION TO BE CARRIED FORWARD FOR MORE THAN EIGHT YEARS. HENCE D ISALLOWED. IN APPEAL RELYING UPON THE ORDER PASSED BY THE APPELLATE AUTHORITY FO R ASSESSMENT YEAR 2013-14 THE LD. CIT(A) TAKING INTO CONSIDERATION OF THE JUDGMENT PASSED BY THE HONBLE JUDICIAL HIGH COURT IN THE CASE OF GENERAL MOTORS I NDIA PVT. LTD. VS. DCIT REPORTED IN 354 ITR 244 (2012) ALLOWED SUCH CLAIM OF THE ASSESSEE WITH THE FOLLOWING OBSERVATION :- 'THE SECOND GROUND OF APPEAL IS AGAINST THE DISALLO WANCE OF CLAIM OF UNABSORBED DEPRECIATION OF RS. 38,01,74,402/- PERTAINING TO AY 2001-02 AND EARLIER YEARS. WHILE DISALLOWING THE CLAIM THE AO STATED AS UNDER: 'SCRUTINY OF THE ASSESSMENT ORDER REVEALED THAT THE ASSESSEE HAD BROUGHT FORWARD BUSINESS LOSS OF RS. 4,58,19,842/- AND UNABSORBED D EPRECIATION OF RS. 38,01,74,402/- PERTAINING TO A.Y. 2001-02. AS THE TIME LIMIT FOR S ET OFF OF BUSINESS LOSS AND UNABSORBED DEPRECIATION WAS COMPLETED IN A.Y. 2009- 10, THE ASSESSEE HAD NOT CARRIED FORWARD THE BUSINESS LOSS OF RS. 4,85,19,842/- BUT THE ASSESSEE HAD MERGED DEPRECIATION LOSS OF RS. 38,01,74,402/- OF A.Y. 200 1-02 WITH A.Y. 2002-03 AND CLAIMED CARRY FORWARD TO SUBSEQUENT YEARS. AS THE DEPRECIATION LOSS AS PER THE PROVISIONS OF S ECTION 32(2) AND JUDGMENT QUOTED ABOVE, CANNOT BE CARRIED FORWARD BEYOND EIGHT YEARS , THE DEPRECIATION LOSS OF RS.38,01,74,402/-OF A.Y. 2001-02 WAS IRREGULAR. IN VIEW OF THE ABOVE DISCUSSION, CARRY FORWARD OF UNABSORBED DEPRECIATION OF A.Y. 20 01-02 RS. 38,01,74,402/- WILL NOT BE ALLOWED TO THE ASSESSEE.' 6.2 ALONGWITH THE CONTENTION AND OTHER CASE LAWS TH E APPELLANT CITED THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT OF GUJARAT, A HMEDABAD IN THE CASE OF GENERAL MOTORS INDIA (P.) LTD. VS. DCIT [354 ITR 244 ] [ 20 12 ] 'THE SAID CBDT CIRCULAR CLARIFIES THE INTENT OF THE AMENDMENT THAT IT IS FO R ENABLING THE INDUSTRY TO CONSERVE SUFFICIENT FUNDS TO REPLACE PLANT AND MACHINERY AND , ACCORDINGLY, THE AMENDMENT DISPENSES WITH THE RESTRICTION OF 8 YEARS FOR CARRY FORWARD AND SET OFF OF UNABSORBED DEPRECIATION. THIS AMENDMENT HAS BECOME APPLICABLE FROM ASSESSMENT YEAR 2002-03 AND SUBSEQUENT YEARS MEANING THAT ANY UNABSORBED DE PRECIATION AVAILABLE TO AN ASSESSEE ON 1ST DAY OF APRIL, 2002 (ASSESSMENT YEAR 2002-03) WILL BE DEALT WITH IN ACCORDANCE WITH THE PROVISIONS OF SECTION 32(2) AS AMENDED BY FINANCE ACT, 2001 AND NOT BY THE PROVISIONS OF SECTION 32(2) AS IT: STOOD BEFORE THE SAID AMENDMENT. IT THE INTENTION OF THE LEGISLATURE HAS BEEN TO ALLOW THE UNABSORBED DEPRECIATION ALLOWANCE WORKED OUT IN ASSESSMENT YEAR 1997-98 ONLY FOR EIGH T SUBSEQUENT ASSESSMENT YEARS EVEN AFTER THE AMENDMENT OF SECTION 32(2) BY FINANC E ACT, 2001, IT WOULD HAVE ITA NO. 2121/AHD/2017 A.Y. 2014-15 3 INCORPORATED A PROVISION TO THAT EFFECT. HOWEVER, I T DOES NOT CONTAIN ANY SUCH PROVISION. HENCE, A PURPOSIVE AND HARMONIOUS INTERP RETATION HAS TO BE TAKEN KEEPING IN VIEW THE PURPOSE OF AMENDMENT OF SECTION 32(2). WHILE CONSTRUING TAXING STATUTES, RULE OF STRICT INTERPRETATION HAS TO BE APPLIED, GI VING FAIR AND REASONABLE CONSTRUCTION TO THE LANGUAGE OF THE SECTION WITHOUT LEANING TO T HE SIDE OF ASSESSEE OR THE REVENUE. BUT IF THE LEGISLATURE FAILS TO EXPRESS CLEARLY AND THE ASSESSEE BECOMES ENTITLED FOR A BENEFIT WITHIN THE AMBIT OF SECTION BY THE CLEAR WO RDS USED IN SECTION, THE BENEFIT ACCRUING TO THE ASSESSEE CANNOT BE DENIED. HOWEVER, CIRCULAR NO. 14 OF 2001 HAD CLARIFIED THAT UNDER SECTION 32(2), IN COMPUTING TH E PROFITS AND GAINS OF BUSINESS OR PROFESSION FOR ANY PREVIOUS YEAR, DEDUCTION OF DEPR ECIATION UNDER SECTION 32 SHALL BE MANDATORY. THEREFORE, THE PROVISIONS OF SECTION 32( 2) AS AMENDED BY FINANCE ACT, 2001 WOULD ALLOW THE UNABSORBED DEPRECIATION ALLOWA NCE AVAILABLE IN THE ASSESSMENT YEARS 1997-98, 1999-2000, 2000-01 AND 2001-02 TO BE CARRIED FORWARD TO THE SUCCEEDING YEARS, AND IF ANY UNABSORBED DEPRECIATIO N OR PART THEREOF COULD NOT BE SET OFF TILL THE ASSESSMENT YEAR 2002-03 THEN IT WOULD BE CARRIED FORWARD TILL THE TIME IT IS SET OFF AGAINST THE PROFITS AND GAINS OF SUBSEQUENT YEARS.' IT FURTHER STATED THAT 'IT IS HELD THAT ANY UNABSOR BED DEPRECIATION AVAILABLE TO AN ASSESSEE ON 1ST DAY OF APRIL, 2002 (A.Y. 2002-03) W ILL BE DEALT WITH IN ACCORDANCE WITH THE PROVISIONS OF SECTION 32(2) AS AMENDED BY FINANCE ACT, 2001. AND ONCE THE CIRCULAR NO. 14 OF 2001 CLARIFIED THAT THE RESTRICT ION OF 8 YEARS FOR CARRY FORWARD AND SET OFF OF UNABSORBED DEPRECIATION HAD BEEN DISPENS ED WITH, THE UNABSORBED DEPRECIATION FROM ASSESSMENT YEAR 1997-98 UP TO THE ASSESSMENT YEAR 2001-02 GOT CARRIED FORWARD TO THE ASSESSMENT YEAR2002-03 AND B ECAME PART THEREOF, IT CAME TO BE GOVERNED BY THE PROVISIONS OF SECTION 32(2) AS A MENDED BY FINANCE ACT, 2001 AND AVAILABLE FOR CARRY FORWARD AND SET OFF AGAINST THE PROFITS AND GAINS OF SUBSEQUENT YEARS, WITHOUT ANY LIMIT WHATSOEVER.' AFTER GOING THROUGH THE FACTS OF THE CASE AND THE J UDGMENT OF HON'BLE HIGH COURT OF GUJARAT, AHMEDABAD IN THE ABOVE MENTIONED CASE WHICH CONTAINS IDENTICAL FACTS, THE DISALLOWANCE MADE BY THE AO DESERVES TO BE DELETED, THEREFORE, IT IS DELETED. THIS GROUND OF APPEAL IS ALLOWED.' AS THE ISSUE INVOLVED DURING THE YEAR UNDER CONSIDE RATION IS SAME, AS DECIDED EARLIER, THE DISALLOWANCE OF CARRIED FORWARD OF DEPRECIATION OF RS. 38,01,74,402/- IS NOT FOUND JUSTIFIED. THE A.O. IS DIRECTED TO ALLOW THE CARRI ED FORWARD OF DEPRECIATION OF RS. 38,01,74,402/- PERTAINING TO A.Y. 2001-02 TO NEXT A SSESSMENT YEARS. THIS GROUND OF APPEAL IS ALLOWED. 3. AT THE TIME OF HEARING OF THE MATTER THE LD. COUN SEL APPEARING FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ASSESSEES CA SE IS ALSO COVERED BY THE JUDGMENT PASSED BY THE COORDINATE BENCH IN ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 2009-10 AND 2012-13 COPY WHEREOF HAVE ALSO BEE N HANDED OVER TO US. HOWEVER, THE LD. DR FAILED TO CONTROVERT THE CONTEN TIONS MADE BY THE LD. AR IN THIS RESPECT. ITA NO. 2121/AHD/2017 A.Y. 2014-15 4 HEARD THE RIVAL CONTENTIONS; PERUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. WE HAVE ALSO CAREFULLY CONSIDERED THE ORDE R PASSED BY THE COORDINATE BENCH IN ITA NOS. 1993-1994/AHD/2016 FOR ASSESSMENT YEARS 2009-10 AND 2012- 13 OPERATIVE PORTION WHEREOF IS AS FOLLOWS: WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MAT ERIAL ON RECORD CAREFULLY. WE HAVE NOTICED THAT THE COORDINATE BENCH OF ITAT AHME DABAD VIDE ITA NO. 2393/AHD/2013 DATED 03.05.2017 IN THE CASE OF GUJAR AT LEASE FINANCE LTD. HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF ASSESSEE. THE PART OF THE JUDICIAL FINDINGS AND THE PRINCIPLES LAID DOWN BY THE HONBLE JURISDICTIO NAL HIGH COURT IN THE CASE OF GENERAL MOTORS PVT. LTD. ARE REPRODUCED HERE AS UND ER:- 'WE ARE OF THE CONSIDERED OPINION THAT ANY UNABSORB ED DEPRECIATION AVAILABLE TO AN ASSESSEE ON 1ST DAY OF APRIL 2002 (A.Y. 2002-03) WI LL BE DEALT WITH IN ACCORDANCE WITH THE PROVISIONS OF SECTION 32(2) AS AMENDED BY FINAN CE ACT, 2001. AND ONCE THE CIRCULAR NO. 14 OF 2001 CLARIFIED THAT THE RESTRICT ION OF 8 YEARS FOR CARRY FORWARD AND SET OFF OF UNABSORBED DEPRECIATION HAD BEEN DISPENS ED WITH, THE UNABSORBED DEPRECIATION FROM A.Y. 1997-98 UP TO THE A.Y. 2001- 02 GOT CARRIED FORWARD TO THE ASSESSMENT YEAR 2002-03 AND BECAME PART THEREOF, IT CAME TO BE GOVERNED BY THE PROVISIONS OF SECTION 32(2) AS AMENDED BY FINANCE A CT, 2001 AND WERE AVAILABLE FOR CARRY FORWARD AND SET OFF AGAINST THE PROFITS AND G AINS OF SUBSEQUENT YEARS, WITHOUT ANY LIMIT WHATSOEVER. ' THE RELEVANT PART OF THE DECISION OF THE CO-ORDINAT E BENCH OF THE ITAT DECIDED IN THE CASE OF GUJARAT LEASE FINANCE LTD. VIDE ITA NO. 239 3/AHD/2013 DATED 03/05/2017 IS REPRODUCED' AS HEREUNDER:- '6. WE HAVE HEARD THE RIVAL CONTENTIONS. WE HAVE AL SO PERUSED THE JUDICIAL PRONOUNCEMENT DELIVERED BY THE HON'BLE HIGH COURT O F GUJARAT IN THE CASE OF GENERAL MOTORS INDIA (P.) LTD VS. DCIT (2012) 25 TA XMANN.COM WHICH WAS ELABORATED IN DETAIL BY THE LD. CIT(A) IN HIS ORDER AS SUPRA IN THIS ORDER. WE HAVE ALSO PERUSED THE JUDICIAL PRONOUNCEMENT OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. GUJARAT THEMIS BIOSYN LTD. [2014] 44 TAXMAN N. COM 204 (GUJARAT) IN WHICH AFTER CONSIDERING THE JUDGMENT GIVEN IN GENERAL MOT ORS INDIA (P) LTD, IT WAS HELD THAT CARRY FORWARD OF UNABSORBED DEPRECIATION CONCERNING IMPUGNED ASSESSMENT YEARS COULD BE SET OFF IN SUBSEQUENT YEARS WITHOUT ANY SE T TIME LIMIT. IN VIEW OF THE ABOVE JUDICIAL PRONOUNCEMENT ON THE ISSUE AND THE ELABORA TE FINDINGS OF THE LD. CIT(A), WE DO NOT FIND ANY REASON TO INTERFERE IN THE DECISION OF THE ID. CIT(A).' RESPECTFULLY FOLLOWING THE DECISION OF THE CO-ORDIN ATE BENCH AS SUPRA, WE DO NOT FIND ANY ERROR IN THE FINDING OF LD. CIT(A), THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED. IN THE RESULT, BOTH THE APPEALS OF THE R EVENUE ARE DISMISSED. 5. RESPECTFULLY RELYING UPON THE ORDER PASSED BY TH E COORDINATE BENCH WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD . CIT(A) SO, AS TO WARRANT ITA NO. 2121/AHD/2017 A.Y. 2014-15 5 INTERFERENCE. THE QUESTION IS ACCORDINGLY ANSWERED IN THE AFFIRMATIVE THAT IS IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. CO NSEQUENTLY THE APPEAL FAILS AND IS ACCORDINGLY DISMISSED. 6. IN THE RESULT, REVENUES APPEAL IS DISM ISSED. [ORDER PRONOUNCED IN THE COURT ON 28-03-2019.] SD/- SD/- ( WASEEM AHMED ) ( MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 28/03/2019 TANMAY TRUE COPY &'!()*+&*%/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. , / THE RESPONDENT. 3. -- . / CONCERNED CIT 4. . ( ) / THE CIT(A) 5. *12(( , / DR, ITAT, 6. 2456 / GUARD FILE. &' / BY ORDER, 7/ -8 (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION : 27-03-2019 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER. : 28-03-2019 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P.S./P.S : 28-03-2019 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT. : 28-03-2019 5. DATE ON WHICH FAIR ORDER PLACED BEFORE OTHER MEMBER : 28-03-2019 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P.S./P.S. : 28-03-2019 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK. : 29-03-2019 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. : 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER. : 10. DATE OF DESPATCH OF THE ORDER :
