M/S. SKANEM INDIA PVT LTD., MUMBAI V. ACIT, CIR-11(2)(1), MUMBAI

ITA 2180/MUM/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 6711 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 04-10-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 12-06-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AKASH PRAJAPATI
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3); 142(1); 250; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA no.2180/Mum./2023 (Assessment Year : 2016–17) M/s. Skanem India Pvt. Ltd. 513, Dynasty Business Park Andheri Kurla Road, Near J.B. Nagar Chakala Metro Station, Andheri (E) Mumbai 400 059 PAN – AAAC15684H ................ Appellant v/s Asstt. Commissioner of Income Tax Circle–11(2)(1), Mumbai ................ Respondent Assessee by : Shri Akash Prajapati Revenue by : Shri Ram Krishna Kedia Date of Hearing – 05/10/2023 Date of Order – 09/10/2023 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee challenging the impugned order dated 24/04/2023, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2016–17. 2. In its appeal, the assessee has raised the following grounds:– “1. On the facts and circumstances of the case and in law, the learned CIT(A) erred in dismissing the appeal and disallowances of the appellant claim of M/s. Skanem India Pvt. Ltd. ITA no.2180/Mum./2023 Page | 2 unabsorbed depreciation of Rs.4,17,93,072/-, without considering the facts of case. 2. The Appellant craves, leaves to add, alters, amends or deletes any grounds of Appeal at the time of hearing.” 3. The only dispute raised by the assessee is against denial of carry forward of unabsorbed depreciation pertaining to the assessment year 2015-16. 4. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is a company engaged in the business of manufacturing of self-adhesive labels. For the year under consideration, the assessee filed its return of income on 24/11/2017 declaring a total loss of Rs. 5,97,27,627 under the normal provisions of the Act. The return filed by the assessee was selected for complete scrutiny through CASS and statutory notices under section 143(2) as well as under section 142(1) of the Act were issued and served on the assessee. During the assessment proceedings on perusal of the Income Tax Return (“ITR”), it was observed that the assessee has claimed an unabsorbed depreciation of Rs. 4,17,93,072 pertaining to the assessment year 2015-16 to be carried forward to the next year. Further on perusal of the ITR filed by the assessee for the assessment year 2015-16, it was noticed that the assessee has not claimed any unabsorbed depreciation to be carried forward for further years. It was also observed that the said loss was not even claimed by the assessee in the Tax Audit Report (Form 3CD). Accordingly, the assessee was asked to show cause as to why the unabsorbed depreciation of Rs. 4,17,93,072 claim to be carried forward in the assessment year 2016-17 should not be disallowed. The Assessing Officer (“AO”) vide order dated 29/12/2018 passed under section 143(3) of the Act, inter-alia, M/s. Skanem India Pvt. Ltd. ITA no.2180/Mum./2023 Page | 3 disallowed the claim of the assessee to carry forward the unabsorbed depreciation of Rs. 4,17,93,072 to the next year. The learned CIT(A), vide impugned order, dismissed the ground raised by the assessee on this issue and upheld the findings of the AO. Being aggrieved, the assessee is in appeal before us. 5. Having considered the submissions of both sides and perused the material available on record, we find that before the learned CIT(A) the assessee submitted that as per the ITR for the assessment year 2015-16, the total loss of Rs. 9,02,62,790 was arrived after allowing depreciation of Rs. 4,17,93,073 and the same was considered while computing the total income. It was further submitted that the amount of depreciation has been properly computed and disclosed in the Tax Audit Report (Form 3CD) for the assessment year 2015-16 and shown in the depreciation schedule of ITR and the same has been automatically reflected under the head of computation of total income schedule in ITR. Thus it was submitted that the total loss of Rs. 9,02,62,790, as declared in the assessment year 2015-16, included in terms of depreciation of Rs. 4,17,93,073, which has been correctly claimed in the ITR. The assessee further submitted that it missed out on making proper bifurcations of unabsorbed depreciation in ITR form under Schedule-UD in the assessment year 2015-16, however the same has been properly bifurcated in the ITR of subsequent year, i.e. from assessment year 2016-17 onwards. In support of its submission, the assessee furnish the copy of ITR and Form 3CD for the assessment years 2015-16 and 2016-17 having details of depreciation before the learned CIT(A), as evident from page no. 5 of the impugned order. M/s. Skanem India Pvt. Ltd. ITA no.2180/Mum./2023 Page | 4 However, the learned CIT(A) without considering any of the submissions of the assessee proceeded to uphold the disallowance of carry forward of unabsorbed depreciation of the assessment year 2015-16 to the next year. In view of the facts and circumstances as noted above, we deem it appropriate to restore this issue to the file of the AO for de novo adjudication as per law after the necessary verification of the details as submitted by the assessee. The assessee is directed to substantiate its claim of availability of unabsorbed depreciation in the assessment year 2015-16 for being carried forward to subsequent years. Needless to mention no order shall be passed without affording reasonable opportunity of being heard to the assessee. As a result, the impugned order is set aside and the grounds raised by the assessee are allowed for statistical purposes. 6. In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 09/10/2023 Sd/- PRASHANT MAHARISHI ACCOUNTANT MEMBER Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 09/10/2023 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Assistant Registrar ITAT, Mumbai