Mamta Silk Mills Pvt.Ltd., Surat V. The Addl.CIT.,Range-1, Surat

ITA 2700/AHD/2011

• Counselvise Citation: 270020514 RSA 2011
• Duration Of Justice: 3 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 24-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 02-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 32

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI RAJPAL YADAV, JUDICIAL MEMBER ITA NO. 2700/AHD/2011 / ASSESSMENT YEAR: 2008-09 M/S. MAMTA SILK MILLS P. LTD., K-1286, SURAT TEXTILE MARKET, RING ROAD, SURAT PAN : AABCM 5904 D VS ACIT, RANGE-1, SURAT / // / (APPELLANT) / // / (RESPONDENT) ASSESSEE(S) BY : SHRI MEHUL SHAH, AR REVENUE BY : SHRI ROOP CHAND, SR. DR. ! ' #$% ! ' #$% ! ' #$% ! ' #$% / DATE OF HEARING : 24/04/2015 &' ' #$% / // / DATE OF PRONOUNCEMENT: 15 /05/2015 () () () ()/ // / O R D E R PER G.D. AGRAWAL, VICE PRESIDENT: THIS IS AN APPEAL FILED BY THE ASSESSEE AND IS DIRE CTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, SURAT DATED 15.09.2011 PERTAINING TO ASSESSMENT YEAR 2008-09. 2. GROUND NO.1 OF THE ASSESSEES APPEAL READS AS UN DER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER BY S USTAINING ADDITION OF RS.2,88,855/- MADE BY ASSESSING OFFICER ON ACCOUNT OF WORK IN PROGRESS. 3. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L FAIRLY CONCEDED THAT THE ISSUE HAS DECIDED AGAINST THE ASSESSEE BY THE I TAT IN HIS OWN CASE FOR ASSESSMENT YEAR 2006-07. THEREFORE, HIS LIMITED PRA YER AT THE TIME OF HEARING OF APPEAL BEFORE US WAS THAT THE DIRECTION MAY BE GIVEN TO INCREASE ITA NO. 2700/AHD/2011 M/S. MAMTA SILK MILLS PVT LTD VS. ACIT AY: 2008-09 2 THE OPENING WORK-IN-PROGRESS OF THE NEXT YEAR. THE LD. DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION TO THE ISSUANCE OF ABOVE DIRECTION. WE, THEREFORE, CONFIRM THE ADDITION MADE BY THE ASSESSI NG OFFICER IN RESPECT OF WORK-IN-PROGRESS. 4. THE CLOSING WORK-IN-PROGRESS OF THIS YEAR WOULD BE THE OPENING WORK-IN-PROGRESS OF THE NEXT YEAR. THEREFORE, ONCE THE CLOSING WORK-IN- PROGRESS OF THE YEAR UNDER CONSIDERATION HAS INCREA SED ON ACCOUNT OF ADDITION MADE BY THE ASSESSING OFFICER, THE CONSEQU ENTIAL EFFECT HAS TO BE GIVEN IN THE OPENING WORK-IN-PROGRESS OF THE NEXT Y EAR. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO INCREASE THE OPENIN G WORK-IN-PROGRESS OF THE NEXT YEAR BY THE AMOUNT OF ADDITION SUSTAINED IN TH E YEAR UNDER CONSIDERATION TO THE CLOSING WORK-IN-PROGRESS. SUB JECT TO ABOVE DIRECTION, GROUND NO.1 OF THE ASSESSEES APPEAL IS REJECTED. 5. GROUND NO.2 OF THE ASSESSEES APPEAL READS AS UN DER:- 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER BY S USTAINING DISALLOWANCE OF RS.22,243/- MADE BY ASSESSING OFFICER ON ACCOUNT OF LATE PAYMENT OF EMPLOYEES CONTRIBUTION TO P.F. 6. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L FAIRLY STATED THAT THIS ISSUE IS AGAINST THE ASSESSEE IN VIEW OF THE DECISI ON OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. GUJARAT STATE ROA D TRANSPORT CORPORATION REPORTED AT (2014) 366 ITR 170 (GUJ.). RESPECTFULL Y FOLLOWING THE SAME, WE REJECT THE GROUND NO.2 OF THE ASSESSEES APPEAL. 7. GROUND NO.3 OF THE ASSESSEES APPEAL READS AS UN DER:- ITA NO. 2700/AHD/2011 M/S. MAMTA SILK MILLS PVT LTD VS. ACIT AY: 2008-09 3 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HA S ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER BY S USTAINING DISALLOWANCE OF RS2,40,000/- MADE BY ASSESSING OFFICER ON ACCOUN T OF DIRECTORS REMUNERATION. 8. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L FAIRLY CONCEDED THAT THIS ISSUE IS SET ASIDE BY THE ITAT TO THE FILE OF THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2006-07 VIDE ITA NO.2405/AHD/2009. HE, THEREFORE, REQUESTED THAT THIS MATTER MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER TO BE RE-ADJUDICATED AS PER THE DIRECTION O F THE ITAT FOR ASSESSMENT YEAR 2006-07. THE LD. DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION TO THIS REQUEST OF THE ASSESSEES COUNSEL. WE, THEREFORE, SET ASIDE THE ISSUE RAISED IN GROUND NO.3 OF ASSESSEES APPEAL TO THE FILE OF THE ASSESSING OFFICER AND DIRECT HIM TO RE-ADJUDICATE THIS ISSUE AS PER THE D IRECTION OF THE ITAT FOR ASSESSMENT YEAR 2006-07. NEEDLESS TO MENTION THAT WHILE RE-ADJUDICATING THE ISSUE, HE WILL ALLOW ADEQUATE OPPORTUNITY OF BE ING HEARD TO THE ASSESSEE. 9. GROUND NO.4 OF THE ASSESSEES APPEAL READS AS UN DER:- 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE ASSESSING OFFICER HAS ERRED IN DISALLOWING CARR Y FORWARD OF UNABSORBED DEPRECIATION FOR A.Y. 1996-97 TO 2000-01 U/S 32(2) OF THE I.T. ACT. ALTHOUGH ASSESSEE HAS CONTESTED ABOVE ISSUE BY RAIS ING ADDITIONAL GROUND OF APPEAL IN THE COURSE OF APPELLATE PROCEEDINGS BE FORE LEARNED CIT(A), THE LEARNED CIT(A) ERRED IN NOT ADMITTING THE ADDITIONA L GROUND OF APPEAL. 10. WE HAVE HEARD BOTH THE PARTIES AND WE FIND THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HO NBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GENERAL MOTORS INDIA (P). LTD. V. DCIT, REPORTED IN (2013) 257 CTR 123, WHEREIN THEIR LORDSHIPS OF HON BLE HIGH COURT HELD AS UNDER: ITA NO. 2700/AHD/2011 M/S. MAMTA SILK MILLS PVT LTD VS. ACIT AY: 2008-09 4 DEPRECIATION CARRY FORWARD AND SETTING OFF OF UNA BSORBED DEPRECIATION EFFECT OF AMENDMENT OF SECTION 32 BY FINANCE ACT 20 01 ISSUE WAS WHETHER UNABSORBED DEPRECIATION PERTAINING TO A.Y. 1997-98 COULD BE ALLOWED TO THE CARRIED FORWARD AND SET OFF AFTER A PERIOD OF EIGHT YEARS OR IT WOULD BE GOVERNED BY SECTION 32 AS AMENDED BY FINANCE ACT 20 01 HELD, CIRCULAR NO.14 OF 2001 CLARIFIED THAT RESTRICTION OF 8 YEARS FOR CARRY FORWARD AND SET OFF OF UNABSORBED DEPRECIATION HAD BEEN DISPENSED W ITH UNABSORBED DEPRECIATION FROM A.Y. 1997-98 CAN BE CARRIED FORWA RD AND SET OFF AGAINST INCOME OF A.Y. 2006-07 ASSESSEES APPEAL ALLOWED. NO CONTRARY DECISION OF HONBLE JURISDICTIONAL HIG H COURT OR APEX COURT IS BROUGHT TO OUR KNOWLEDGE. WE, THEREFORE, R ESPECTFULLY FOLLOWING THE ABOVE DECISION OF HONBLE JURISDICTIONAL HIGH C OURT, SET ASIDE THE ORDER OF THE AUTHORITIES BELOW ON THIS POINT AND RESTORE BACK THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. WE DIRECT HIM TO ALLOW THE CARRIED FORWARD AND SET OFF OF UNABSORBED DEPRECIATION IN THE LIGHT OF ABOV E DECISION OF HONBLE JURISDICTIONAL HIGH COURT. 11. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 15 TH MAY, 2015 AT AHMEDABAD. SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (G.D. AGRAWAL) VICE-PRESIDENT AHMEDABAD; DATED 15/05/2015 BIJU T., PS () ' #* +(*# () ' #* +(*# () ' #* +(*# () ' #* +(*#/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ,, # - / CONCERNED CIT 4. - ( ) / THE CIT(A) 5. *01 # , , / DR, ITAT, AHMEDABAD 6. 12 3! / GUARD FILE . () () () () / BY ORDER, TRUE COPY 4 44 4/ // / ,5 ,5 ,5 ,5 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD