Deputy Commissioner of Income Tax, Circle-1 (1)., Panaji V. M/s Brenlic Investments Pvt. Ltd., Panaji

ITA 266/PAN/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1384 (ITAT-PANAJI)
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-09-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 17-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAMESH S MUTAGAR
• Assessee Lawyers: SIDD H ESH PATKAR
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3); 115JB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 2 66 /PNJ/201 5 (ASST. YEAR : 200 7 - 0 8 ) D CIT, CIRCLE - 1(1), PANAJI. VS. M/S. BRENLIC INVES T MENTS PVT. LTD., VILLA NO.GI3, BELMONT , TERRA NOVA KADAMBA PLEATUE, NEXT TO SAI BABA MANDIR, CHIMBEL GOA. PAN NO. AAACB 8627 R (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SIDD H ESH PATKAR ADV. DEPARTMENT BY : SHRI RAMESH S. MUTAGAR - D R DATE OF HEARING : 08 / 0 9 /2015 . DATE OF PRONOUNCEMENT : 08 / 0 9 /201 5 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , PAN A JI , DATED 1 0 /0 3 /201 5 . 2. THE SOLE ISSUED INVOLVED IN THIS APPEAL OF THE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DIRECTING THE ASSESSING OFFICER THAT WHILE COMPUTING THE BOOK PROFIT UNDER SEC. 115JB , UNABSORBED BROUGHT FORWARD DEPRECIATION SHOULD BE REDUCED FROM THE NET PROFIT . 3 . BRIEF FACTS LEADING TO THIS APPEAL ARE THAT THE ASSESSEE FILED RETURN OF INCOME WHEREIN WHILE COMPUTING THE BOOK PROFIT UNDER SEC. 115JB AT 2 ITA NO. 266 /PNJ/201 5 NIL T HE ASSESSEE REDUCED 60,274/ - FROM THE NET PROFIT ON ACCOUNT OF UNABSORBED BROUGHT FORWARD DEPRECIATION. THE SAME WAS ALLOWED BY THE ASSESSING OFFICER VIDE HIS ORDER DATED 30/11/2009 PASSED UNDER SEC. 143(3) OF THE ACT. THEREAFTER, THE ASSESSING OFFICER PASSED AN ORDER ON 15/03/2012 UNDER SEC. 154 OF THE ACT AND DISA LLOWED DEDUCTION OF BROUGHT FORWARD UNABSORBED DEPRECIATION OF 60,274/ - FROM THE NET PROFIT OF THE YEAR ON THE GROUND THAT AS PER THE PROVISIONS OF SEC. 115JB, THE AMOUNT OF BROUGHT FORWARD BUSINESS LOSS OR BROUGHT FORWARD UNABSORBED DEPRECIATION, WHICHEVER IS LESS AS PER BOOKS IS TO BE DEDUCTED FROM THE NET PROFIT. THEREFORE, THE ASSESSEE WAS NOT ENTITLED TO ANY DEDUCTION FROM THE NET PROFIT FOR UNABSORBED BROUGHT FORWARD DEPRECIATION. 4 . BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AND THE COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING THAT THE ACT HAS ONLY PROVIDED THAT WHICH BROUGHT FORWARD LOSS HAS TO BE S ET OFF FIRST. SINCE BUSINESS LOSS REDUCED TO NIL, THE ASSESSING OFFICER HAS TO ALLOW SET OFF OF BROUGHT FORWARD DEPRECIATION LOSS. ACCORDINGLY, HE DIRECTED THE ASSESSING OFFICER TO ALLOW SET OFF OF BROUGHT FORWARD DEPRECIATION WHILE COMPUTING INCOME UNDER MAT UNDER SEC. 115JB. 5. BEING AGGRIEVED BY THIS ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), THE REVENUE IS IN APPEAL BEFORE US. 6 . AT THE OUTSET AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SHRI SIDDHESH PATKAR, ADVOCATE VERY FAIRLY CONCEDED THAT THE ORDER OF THE ASSESSING OFFICER WAS INCONF O RMITY WITH THE PROVISIONS OF SEC. 115JB OF THE ACT WHEREIN VIDE CLAUSE (III) TO EXPLANATION TO SEC. 115JB, IT IS PROVIDED THAT THE AMOUNT OF LOSS BROUGHT FORWARD OR UNABSORBED DEPRECI ATION WHICHEVER IS LESS AS PER BOOKS OF ACCOUNTS HAS TO BE 3 ITA NO. 266 /PNJ/201 5 REDUCED FROM THE NET PROFIT AS SHOWN IN THE PROFIT & LOSS ACCOUNT TO ARRIVE AT THE BOOK PROFIT . 7 . IN VIEW OF THE ABOVE SUBMISSIONS OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, WE SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND RESTORE BACK THE ORDER OF THE ASSESSING OFFICER. THUS, THE GR O UND OF APPEAL OF THE REVENUE IS ALLOWED. 8 . THE OTHER SUBMISSION OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE WAS THAT THE RATE APPLICABLE FOR MINIMUM ALTERNAT E TAX IN THE PRESENT YEAR WAS 10% AND THE INCOME UNDER MINIMUM ALTERNATE TAX SHOULD BE TAXED BY THE ASSESSING OFFICER AT THE RATE OF 10% AND NOT 30%. WE DIRECT THE ASSESSING OFFICER TO APPLY RATE OF TAX APPLICABLE ON MINIMUM ALTERNATE TAX IN THE PRESENT YEAR UNDER APPEAL WHILE TAXING THE BOOK PROFIT UNDER SEC. 115JB OF THE ACT. WITH THESE DIRECTIONS, THE APPEAL OF THE REVENUE IS ALLOWED. 9. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON TUESDAY , THE 0 8 TH DAY OF SEPTEMBER , 201 5 AT GOA . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 0 8 TH SEPTEMBER , 201 5 . VR/ - 4 ITA NO. 266 /PNJ/201 5 COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI 5 ITA NO. 266 /PNJ/201 5 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 0 8 .0 9 .2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 09 .09 .2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 09 /0 9 /2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 09 /0 9 /2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 09 /0 9 /2015 SR.PS 6. DATE OF PRONOUNCEMENT 08 /0 9 /2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 09 /0 9 /2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER