Tasty Bite Eatables Limited, Pune V. Deputy Commissioner of Income tax, Pune

ITA 2717/PUN/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7315 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 14-08-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 02-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CITA PUNE ON UPHOLDING TH E
• Assessee Lawyers: IS DIRECTED AGAINS T PASSED
• Keywords: Depreciation; Rectification of order; Unabsorbed depreciation
• Section: 72; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER . / ITA NO.2717/PUN/2016 / ASSESSMENT YEAR : 2008-09 TASTY BITE EATABLES LIMITED, 204, MAYFAIR TOWERS, WAKDEWADI, SHIVAJINAGAR, PUNE 411 005 PAN : AAACT2317A VS. DCIT, CIRCLE-7, PUNE (APPELLANT) (RESPONDENT) / ORDER PER R.S. SYAL, VP : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE OR DER PASSED BY THE CIT(A)-5, PUNE ON 16-08-2016 UPHOLDING TH E ORDER PASSED BY THE ASSESSING OFFICER (AO) U/S.154 OF THE INCO ME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) IN RELATION TO THE ASSESSMENT YEAR 2008-09. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSE E DECLARED TOTAL INCOME OF RS.38,30,670/- IN ITS RETURN AFTER S ETTING OFF UNABSORBED DEPRECIATION ETC. OF RS.2,06,72,723/-. SCRUTINY APPELLANT BY SHRI AJIT JAIN RESPONDENT BY SHRI S.P. WALIMBE DATE OF HEARING 03-09-2020 DATE OF PRONOUNCEMENT 03-09-2020 ITA NO.2717/PUN/2016 M/S. TASTY BITE EATABLES LIMITED 2 ASSESSMENT WAS COMPLETED DETERMINING TOTAL INCOME AT RS.2.47 CRORE AND ODD. BEFORE INITIATING PROCEEDINGS U/S 154 OF THE ACT, THE AO OBSERVED THAT IN THE ORIGINAL ASSESSMENT PROCEEDINGS, THE ASSESSEE CLAIMED SET OFF OF UNABSORBED DEPRECIATION AT RS.1,65,10,060/- PERTAINING TO THE A.Y. 1997-98 AND RS.5 ,51,182/- PERTAINING TO THE A.Y. 1998-99, WHICH WAS ALLOWED DESPITE OBSERVATIONS IN PARA 7 OF THE ASSESSMENT ORDER THAT THE AS SESSEE WOULD BE ALLOWED SET OFF OF UNABSORBED DEPRECIATION AFTER VERIFICATION, WHICH EXERCISE WAS NOT CARRIED OUT. THE AO OBSERVED THAT UNABSORBED DEPRECIATION TOTALING RS.1,70,61,242/- PERTAIN ING TO A.YS. 1997-98 AND 1998-99 WAS NOT ELIGIBLE FOR CARRY F ORWARD AND SET OFF AFTER A PERIOD OF 8 YEARS IN TERMS OF SECTION 32(2) OF THE ACT. ON BEING SHOW CAUSED, THE ASSESSEE SUBMITTED THAT THE CLAIM OF THE ASSESSEE FOR UNABSORBED DEPRECIATION WAS ELIGIBLE IN VIEW OF THE JUDGMENT OF HONBLE GUJARAT HIGH COURT AND THAT OF THE MUMBAI TRIBUNAL, AS NOTED IN THE ORDER. AFTER CONSIDERING THE OBJECTIONS OF THE ASSESSEE, THE AO OBSERVED THAT THERE WER E TWO POINTS FOR CONSIDERATION. THE FIRST POINT WAS AS TO WHETHER TH ERE WAS ANY CARRY FORWARD LOSS AVAILABLE FOR SET OFF AGAINST TH E INCOME OF THE CURRENT YEAR AND SECOND, WHETHER THE UNABSORBED DEPRECIATION RELATING TO A.YRS. 1997-98 AND 1998-99 COULD BE ITA NO.2717/PUN/2016 M/S. TASTY BITE EATABLES LIMITED 3 ALLOWED TO BE CARRIED FORWARD FOR SET OFF AGAINST THE INCOM E FOR THE YEAR UNDER CONSIDERATION IN THE LIGHT OF SECTION 32(2) OF THE ACT. AS REGARDS THE FIRST POINT, HE OBSERVED THAT THERE WERE NO BROUGHT FORWARD LOSSES AVAILABLE FOR SET OFF AGAINST THE CURRENT YEA RS INCOME AND HENCE, THE ASSESSEE WRONGLY CLAIMED SUCH A S ET OFF, WHICH DESERVED TO BE DISALLOWED. AS REGARDS THE SECOND P OINT, THE AO HELD THAT UNABSORBED DEPRECIATION FOR THE A.YS. 1997-98 AND 1998-99 COULD NOT BE SET OFF AGAINST THE INCOME OF THE YEAR UNDER CONSIDERATION, NAMELY, A.Y. 2008-09 AS PER SECTION 32(2) OF THE ACT. THE LD. CIT(A) ECHOED THE RECTIFICATION ORDER, AGAINS T WHICH THE ASSESSEE HAS APPROACHED THE TRIBUNAL. 3. WE HAVE HEARD BOTH THE SIDES THROUGH VIRTUAL COURT AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. IT IS RELEVANT TO NO TE THAT THE INSTANT PROCEEDINGS ARE U/S.154 OF THE ACT, WHICH IMPLIE S THAT EVEN A DEBATABLE ISSUE CANNOT BE BROUGHT WITHIN THE KEN OF TH IS PROVISION. INSOFAR AS THE AMOUNT OF UNABSORBED DEPREC IATION PERTAINING TO THE A.YRS. 1997-98 AND 1998-98 IS CONCERNE D, WHOSE SET OFF WAS CLAIMED BY THE ASSESSEE IN THE COMPUTATION OF INCOME FOR THE YEAR UNDER CONSIDERATION AND ALSO GOT ALLOWED, WE F IND THAT THE HONBLE GUJARAT HIGH COURT IN GENERAL MOTORS INDIA P.LTD. VS. DCIT (2013) 354 ITR 244 HAS HELD THAT ANY UNABSORBED ITA NO.2717/PUN/2016 M/S. TASTY BITE EATABLES LIMITED 4 DEPRECIATION AVAILABLE TO AN ASSESSEE AS ON 01-04-2002, NA MELY, A.Y. 2002-03, WILL BE DEALT WITH IN ACCORDANCE WITH THE PROVISIO NS OF SECTION 32(2) AS AMENDED BY THE FINANCE ACT, 2001 AND NOT BY THE PROVISIONS OF SECTION 32(2) AS STOOD AMENDED. THAT IS HOW, THE HONBLE GUJARAT HIGH COURT DECIDED THE ISSUE IN FAVOUR OF TH E ASSESSEE. SIMILAR VIEW HAS BEEN REITERATED IN CIT VS. GUJARAT THEMIS BIOSYN LTD. (2014) 105 DTR 72 (GUJ.). IN VIEW OF THE ABOVE POSITION, IT IS CLEAR THAT THE HONBLE GUJARAT HIGH COURT HA S DECIDED SIMILAR ISSUE, AS OBTAINING IN THE FACTS OF THE INSTANT CASE, IN FAVOUR OF THE ASSESSEE. THAT BEING THE POSITION, NO REC TIFICATION U/S. 154 COULD HAVE BEEN DONE QUA THE UNABSORBED DEPRECIATION PERTAINING TO THE A.YRS. 1997-98 AND 1998-99 TOTALING RS.1,70,61,242/-. 4. AS REGARDS THE CLAIM OF THE ASSESSEE FOR SET OFF OF BROUGHT FORWARD LOSSES, WHICH WAS SET OFF BY THE ASSESSEE AND R ECTIFIED BY THE AO IN HIS ORDER U/S.154, THE AO CATEGORICALLY OBSERVED THAT AS PER RECORDS THERE WAS NO BROUGHT FORWARD LOSS AVAILABLE F OR SET OFF AGAINST THE CURRENT YEARS INCOME. SUCH A FINDING HAS NOT BE EN CONTROVERTED BY THE ASSESSEE EITHER BEFORE THE LD. CIT(A) OR THE TRIBUNAL. IN FACT, THE LD. AR CANDIDLY ADMITTED THE STAND POI NT OF THE REVENUE ON THIS SCORE. IN VIEW OF THE FOREGOING DIS CUSSION, IT ITA NO.2717/PUN/2016 M/S. TASTY BITE EATABLES LIMITED 5 IS HELD THAT THE AMOUNT OF SET OFF OF BROUGHT FORWARD LOSS C LAIMED BY THE ASSESSEE IN ITS RETURN WHICH WAS WRONGFULLY ALLOWED IN THE ORIGINAL ASSESSMENT, WAS NOT ADMISSIBLE AND HAS RIGHTLY BEE N RECTIFIED U/S.154 OF THE ACT. 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03 RD SEPTEMBER, 2020. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VI CE PRESIDENT PUNE; DATED : 03 RD SEPTEMBER, 2020 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-5, PUNE 4. 5. 6. THE PR.CIT-4, PUNE , , / DR A, ITAT, PUNE; / GUARD FILE. / TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO.2717/PUN/2016 M/S. TASTY BITE EATABLES LIMITED 6 DATE 1. DRAFT DICTATED ON 03-09-2020 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 03-09-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *