DCIT, Central Circle-2(4), Hyd, Hyderabad V. Gayatri Capital Limited, Hyd, Hyderabad

ITA 427/HYD/2015

• Counselvise Citation: 42722514 RSA 2015
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 19-10-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 17-04-2015
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Assessee Lawyers: B SANTHI KUMAR
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 427/HYD/2015 ASSESSMENT YEAR: 2006-07 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(4), HYDERABAD VS M/S. GAYATRI CAPITAL LTD., HYDERABAD [PAN: AAACG6973A] (APPELLANT) (RESPONDENT) FOR REVENUE : S HRI M. SITARAM , DR FOR ASSESSEE : SHRI B. SANTHI KUMAR , AR DATE OF HEARING : 19 - 1 0 - 201 5 DATE OF PRONOUNCEMENT : 28 - 1 0 - 2015 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS REVENUES APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-12, HYDERABAD DATED 29-01-2015. THE ISSUE IN THIS APPEAL IS WITH REFER ENCE TO SETOFF OF UNABSORBED DEPRECIATION OF RS. 73,38,805/- PERTAINI NG TO AYS. 1999-2000, 2000-01 AND 2001-02 AGAINST THE INCOME A SSESSED. 2. THE ASSESSMENT IN THIS CASE WAS ORIGINALLY C OMPLETED U/S. 143(3) OF THE INCOME TAX ACT [ACT] ON 16-12-2008 AL LOWING SETOFF OF LOSSES/DEPRECIATION OF THE ABOVE AMOUNT AGAINST THE INCOME I.T.A. NO. 427/HYD/2015 M/S. GAYATRI CAPITAL LTD., :- 2 -: DECLARED. SUBSEQUENTLY, PROCEEDINGS U/S. 147 WERE INITIATED AS ASSESSING OFFICER (AO) WAS OF THE OPINION THAT THE UNABSORBED DEPRECIATION PERTAINING TO THE ABOVE ASSESSMENT YEA RS CANNOT BE SETOFF. ASSESSEE OBJECTED TO THE PROCEEDINGS AND S UBMITTED THAT PROVISIONS OF SECTION 32(2) INTRODUCED IN 1996 WERE SUBSEQUENTLY AMENDED BY FINANCE ACT, 2001 W.E.F. 01-04-2002 AND THE POSITION PREVAILING PRIOR TO THE AMENDMENT BROUGHT IN BY THE FINANCE ACT 1996 WAS RESTORED. AO HOWEVER, DID NOT AGREE AND D ISALLOWED THE ABOVE AMOUNTS STATING THAT THERE IS A CURTAILMENT O F RIGHT FOR CARRY FORWARD OF DEPRECIATION EARNED DURING THE AYS. 1997 -98 TO 2001-02 AND THEREFORE, THESE AMOUNTS CANNOT BE SETOFF AGAIN ST OTHER INCOME IN THE IMPUGNED ASSESSMENT YEAR. 3. LD. CIT(A) CONSIDERED THE OBJECTIONS OF ASSESSEE AND CASES RELIED UPON AND ALLOWED THE CLAIM OF ASSESSEE HOLDI NG AS UNDER: 6.1 THE DECISION OF AMRITSAR TRIBUNAL IN THE CASE OF ITO VS. SURAJ SOLVENT & VANASPATI INDUSTRIES [16 DTR (ASR) (TRIB) 492] IS DIRECTLY APPLICABLE TO THE FACTS OF THE CASE. SIMI LARLY, THE DECISION OF THE HON'BLE GUJARAT HIGH COURT DATED 27.08.2012 IN SPL. CIVIL APPLICATION NO. 17 OF 2012 IN THE CASE OF GENERAL M OTORS INDIA PVT. LTD., VS. DCIT IS ALSO DIRECTLY RELATED TO THE FACT S OF THE CASE. IN BOTH THE DECISIONS, SETOFF OF UNABSORBED DEPRECIATI ON OF ASST. YEARS 1996-97 TO 2001-02 WERE PERMITTED TO BE SETOFF AGAI NST THE INCOMES FROM THE BUSINESS OR ANY OTHER HEAD SUBSEQUENTLY, S INCE IT WAS FELT THAT THE ORIGINAL PROVISIONS OF SECTION 32(2) RESTO RED BY THE FINANCE ACT, 2001. 6.2 RESPECTFULLY FOLLOWING THE ABOVE CITED DECISION S, THE CLAIM OF THE APPELLANT IS IN ORDER AND THE SETOFF OF UNAB SORBED DEPRECIATION IS ALLOWED. 4. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE DO N OT SEE ANY REASON TO INTERFERE WITH THE ABOVE DECISION OF THE LD. CIT(A) WHICH IS ALSO CONSISTENT WITH THE ORDERS IN THE FOLLOWING CASES: I.T.A. NO. 427/HYD/2015 M/S. GAYATRI CAPITAL LTD., :- 3 -: I. KMC SPECIALTY HOSPITALS INDIA LTD., VS. ACIT (ITAT CHENNAI, ORDER DT. 05-05-2014); II. KARNATAKA CO-OPERATIVE MILK PRODUCERS FEDERATION L TD., VS. DCIT (2011) [53 DTR (KAR) 81]; III. ITO VS. SURAJ SOLVENT & VANASPATI INDUSTRIES LTD., [16 DTR (ASR) (TRIB) 492]; AND IV. DCIT VS. TAMIL NADU STATE TRANSPORT CORPORATION (VILLUPURAM) LIMITED (ITAT, CHENNAI ORDER DT. 18-01 -2012) 5. SINCE THIS ISSUE IS ALSO DECIDED BY THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF GENERAL MOTORS INDIA PVT. LTD. , VS. DCIT (SUPRA) IN FAVOR OF ASSESSEE, WE APPROVE THE ORDER OF CIT(A) AND DISMISS THE GROUNDS OF REVENUE. 6. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER, 2015 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBE R HYDERABAD, DATED 28 TH OCTOBER, 2015 TNMM I.T.A. NO. 427/HYD/2015 M/S. GAYATRI CAPITAL LTD., :- 4 -: COPY TO : 1. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCL E- 2(4), 3 RD FLOOR, POSNETT BWN., RAMKOTE, HYDERABAD. 2. M/S. GAYATRI CAPITAL LTD., 6-3-1090, B-1, TSR TO WERS, RAJ BHAVAN ROAD, SOMAJIGUDA, HYDERABAD. 3 . CIT (APPEALS) - 12 , HY DERABAD. 4. CIT - (CENTRAL) , HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.