Mr K.M.Kader Ibrahim, CHENNAI V. ACIT, CHENNAI

ITA 2181/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4876 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 21-06-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 24-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R VISWANATHAN
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation; Unabsorbed depreciation; Capital Gains

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH C : CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER] I.T.A NO.2181/MDS/2010 ASSESSMENT YEAR : 2007-08 SHRI K.M.KADER IBRAHIM 761, 4 TH AVENUE ANNA NAGAR WEST EXTENTION CHENNAI 600 101 VS THE ACIT BUSINESS CIRCLE XIII CHENNAI [PAN AAAPI2042N ] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S. SRIDHAR RESPONDENT BY : SHRI R. VISWANATHAN O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE, FOR ASSESSMENT YE AR 2007-08, IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), DATED 16.9.2010. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILE D RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 ADMITTING TOTAL INCOME OF ` 2,66,59,722/- AND THEREAFTER REVISED IT ON 30.11.20 07 ADMITTING TOTAL INCOME OF ` 3,65,00,472/-. THE ASSESSMENT WAS COMPLETED U/S 1 43(3) AT A TOTAL INCOME OF ` 4,28,30,962/-. THE ONLY EFFECTIVE ISSUE RAISED ITA 2181/10 :- 2 -: BEFORE US IS GROUND NO.3 AS THE REMAINING GROUNDS W ERE NOT PRESSED, SO THESE CANNOT BE ALLOWED. GROUND NO.3 READS AS U NDER: THE CIT (APPEALS) ERRED IN SUSTAINING THE ACTION O F THE ASSESSING OFFICER IN NOT PERMITTING/ALLOWING SET OF F OF UNABSORBED DEPRECIATION AGAINST THE CAPITAL GAINS ASSESSED WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 3. AFTER HEARING BOTH SIDES, WE FIND THAT THE SET OFF OF UNABSORBED DEPRECIATION AGAINST THE CAPITAL GAINS IS LEGALLY P ERMISSIBLE IN VIEW OF THE HON'BLE JURISDICTIONAL HIGH COURTS DECISION RE NDERED IN THE CASE OF CIT VS RPIL SIGNALLING SYSTEMS LTD, 328 ITR 283, WH EREIN IT HAS BEEN HELD AS UNDER: HELD, DISMISSING THE APPEAL, THAT BY THE AMENDMENT OF SECTION 32(2) OF THE INCOME-TAX ACT, 1961, WITH EFF ECT FROM APRIL 1, 1997, THE DEEMING FICTION OF TREATING THE EARLIER YEARS UNABSORBED DEPRECIATION AS CURRENT Y EARS DEPRECIATION WAS REMOVED. THE PERIOD AVAILABLE FOR ABSORBING THE UNABSORBED DEPRECIATION AGAINST THE P ROFIT OF THE SUCCEEDING YEARS WAS LIMITED TO EIGHT YEARS. THE TRIBUNAL WAS JUSTIFIED IN CONCLUDING THAT THE ASSES SEE WAS ENTITLED TO SET OFF THE UNABSORBED DEPRECIATION BROUGHT FORWARD ON APRIL 1, 1997 AGAINST THE BUSINE SS PROFITS. 4. THE FACTS OF THIS CASE ARE NOT DISPUTED. WE FIND THAT THE ABOVE DECISION COVERS THE ISSUE IN QUESTION. THEREFORE, BY RESPECTFULLY ITA 2181/10 :- 3 -: FOLLOWING THE RATIO DECIDENDI OF THE ABOVE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT, WHICH IS IN FAVOUR OF T HE ASSESSEE, WE ALLOW GROUND NO.3 OF THIS APPEAL. 5. IN THE RESULT, THE APPEAL STANDS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 21.6.2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (HARI OM MARATHA) JUDICIAL MEMBER DATED: 21 ST JUNE, 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR