The ACIT, Circle-12, Ahmedabad V. GSPC Gas Ltd., Gandhinagar

ITA 2901/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8841 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 31-03-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 09-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAMLESH MAKWANA SR DR
• Assessee Lawyers: S N SOPARKAR
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 32

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , , BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO.2901/AHD/2013 ( / ASSESSMENT YEAR : 2007-08) THE ACIT CIRCLE-12 AHMEDABAD / VS. GSPC GAS LTD. BLOK NO.15, 3 RD FLOOR UDYOG BHAVAN SECTOR-11 GANDHINAGAR # ./ ./ PAN/GIR NO. : ( #& / APPELLANT ) .. ( '#& / RESPONDENT ) #&( / APPELLANT BY : SHRI KAMLESH MAKWANA, SR.DR '#& )( / RESPONDENT BY : SHRI S.N. SOPARKAR, AR *+ ), / DATE OF HEARING 31/03/2017 -./0 ), / DATE OF PRONOUNCEMENT 31/ 03 /2017 / O R D E R PER PRADIP KUMAR KEDIA, AM: THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-GANDHINAGAR [CIT(A) IN SHORT] DATED 05/09/2013 FOR THE ASSESSMENT YEAR (AY) 2007-08. 2. THE REVENUE HAS AGITATED THE ACTION OF THE CIT (A) IN ALLOWING THE ASSESSEES CLAIM OF ACCUMULATED UNABSORBED DEPR ECIATION FOR AYS ITA NO. 2901/AH D/2013 ACIT VS. GSPC GAS LTD. ASST.YEAR 2007-08 - 2 - 2001-02 TO 2003-04 OF RS.85,66,206/- TOWARDS SET OF F AGAINST INCOME FROM OTHER SOURCES DURING THE AY 2007-08. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE ORDERS OF THE AUTHORITIES BELOW. THE ONLY QUESTION INVOLV ED IN THE PRESENT CASE IS ON TREATMENT OF UNABSORBED DEPRECIATION CARRIED FORWARD IN THE SUBSEQUENT ASSESSMENT YEAR. SECTION 32 OF THE INCO ME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') PROVIDES FOR DEPRECIATION ON ASSETS USED FOR PURPOSE OF BUSINESS. SECTION 32(2) PROVID ES FOR CARRY FORWARD AND SET OFF OF UNABSORBED DEPRECIATION. AS PER SEC TION 32(2) OF THE ACT, THE UNADJUSTED BROUGHT FORWARD DEPRECIATION FOR ALL INTENTS AND PURPOSES IS TO BE CONSTRUED AS CURRENT YEARS DEPRECIATION S UBJECT, HOWEVER, TO THE PROVISIONS OF SECTION 72(2) AND SECTION 73(3) AND N O OTHER PROVISION. SECTION 32 BY LEGAL FICTION TREATS THE UNABSORBED D EPRECIATION ALLOWANCES OF THE EARLIER YEARS AS FORMING PART OF THE DEPRECI ATION ALLOWANCE OF THE CURRENT YEAR AND IT REQUIRES THE AUTHORITIES FUNCTI ONING UNDER THE ACT TO DEAL WITH IT AS SUCH. SUB-SECTION (2) OF SECTION 32 IS IN TWO PARTS AND PROVIDES FOR TWO THINGS. ITS FIRST PART PROVIDES F OR CARRY FORWARD OF UNABSORBED DEPRECIATION AND ITS SECOND PART PROVIDE S FOR CLUBBING THE SAID CARRIED FORWARD DEPRECIATION WITH CURRENT YEAR S DEPRECIATION AND DEEMING THE AGGREGATE TO BE CURRENT YEARS DEPRECIA TION. THE IMPACT OF S.72(2) IS ONLY ON CARRIED FORWARD ALLOWANCE AND NO T ON CLUBBING OF UNABSORBED DEPRECIATION. SECTION 73(3) DEALS WITH LOSSES IN SPECULATION ITA NO. 2901/AH D/2013 ACIT VS. GSPC GAS LTD. ASST.YEAR 2007-08 - 3 - BUSINESS WITH WHICH WE ARE NOT CONCERNED AT PRESENT . SINCE THE BROUGHT FORWARD DEPRECIATION IS TO BE CONSIDERED AS FORMIN G PART OF THE CURRENT YEARS DEPRECIATION BY LEGAL FICTION AS NOTED, SAME TREATMENT TO UNABSORBED DEPRECIATION OF EARLIER YEARS WOULD FOLL OW AT PAR WITH THE CURRENT YEARS DEPRECIATION. IN VIEW OF THE AFORES AID POSITION OF LAW SET OFF OF UNABSORBED DEPRECIATION OF THE EARLIER YEARS IS NOT CONFINED TO THE PROFITS AND GAINS OF BUSINESS OR PROFESSION ALONE IN THE RELEVANT ASSESSMENT YEAR. IN THIS VIEW OF THE MATTER, WE FI ND NO INFIRMITY IN THE ORDER OF THE CIT(A) IN ADMITTING THE SET OFF OF UNA BSORBED DEPRECIATION OF THE EARLIER YEAR AGAINST THE CURRENT YEARS INCOME AS CLAIMED. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON COMPLETI ON OF HEARING TODAY ON 31/ 03 /2017 SD/- SD/- ( ) ( ) ( MAHAVIR PRASAD ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 31/ 03 /2017 4..*,.*../ T.C. NAIR, SR. PS ITA NO. 2901/AH D/2013 ACIT VS. GSPC GAS LTD. ASST.YEAR 2007-08 - 4 - !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. #& / THE APPELLANT 2. '#& / THE RESPONDENT. 3. 567, 8, / CONCERNED CIT 4. 8, ( ) / THE CIT(A)-GANDHINAGAR 5. 9:;,*67 , 67 0 , 5 / DR, ITAT, AHMEDABAD 6. ;<+ / GUARD FILE. / BY ORDER, '9,, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 31.3.17 (DICTATION-PAD 7- PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 31.3.17 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.31.3.17 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31.3.17 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER