DCIT - 1(1)(1), MUMBAI V. M/S AMIT SPINNING INDUSTRES LTD., MUMBAI

ITA 4343/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1225 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 29-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MICHAEL JERALD
• Keywords: Depreciation; Unabsorbed depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A , BENCH MUMBAI BEFORE SHRI MAHAVIR SINGH , JM & SHRI M.BALAGANESH, AM ITA NO. 4343 /MUM/201 8 ( ASSESSMENT YEAR : 2009 - 10 ) DCIT 1(1)(1) ROOM NO.533/579, 5 TH FLOOR AAYAKAR BHAWAN M.K.ROAD, MUMBAI 400 020 VS . M/S. AMIT SPINNING INDUSTRIES LTD. A - 60, PHASE - II OKHLA INDUSTRIAL AREA DELHI 110 020 PAN/GIR NO. AAACA3305M (APPELLANT ) .. (RESPONDENT ) REVENUE BY SHRI S. MICHAEL JERALD ASSESSEE BY NONE DATE OF HEARING 09 / 12 /2019 DATE OF PRONOUNCEMEN T 11 / 12 /2019 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 4343/MUM/2018 FOR A.Y. 2009 - 10 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 6, MUMBAI IN APPEAL NO. CIT(A) - 6/IT/90/2016 - 17 DATED 04/04/20 18 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 08/12/2011 BY THE LD. ASST. COMMISSIONER OF INCOME TAX - 1(1), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). 2. THE R EVENUE RAISED TH E FOLLOWING GROUND OF APPEAL: - ITA NO.4343/MUM/2018 M/S. AMIT SPINNING INDUSTRIES LTD. 2 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) WAS RIGHT IN ALLOWING THE APPEAL OF THE ASSESSEE BY HOLDING THAT THE ASSESSEE IS ENTITLED TO CARRY FORWARD UNABSORBED DEPREC IATION FOR THE A.Y. 1995 - 96 TO 1997 - 98 BEYOND 8 ASSESSMENT YEARS, WITHOUT TAKING INTO ACCOUNT THE AMENDMENT BROUGHT IN BY THE FINANCE ACT (NO. 2) OF 1996 TO SEC. 32(2) OF THE I.T, ACT, 1961?' 3. NONE APPEARED ON BEHALF OF THE ASSESSEE. SINCE THE MATTER HA S ALREADY BEEN COVERED, WE PROCEED TO DISPOSE OFF THIS APPEAL ON HEARING THE LD. DR. 3.1. WE FIND THAT ASSESSEE COMPANY IS A SPINNING UNIT AND IS ENGAGED IN MANUFACTURING OF COMBED AND CARDED COTTON YARN. THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FO R THE A.Y.2009 - 10 ON 26/09/2009 DECLARING TOTAL LOSS OF RS.9,93,43,173/ - . WHILE COMPLETING THE ASSESSMENT, THE LD. AO DISALLOWED A SUM OF RS.12,22,25,704/ - ON ACCOUNT OF CARRY FORWARD OF UNABSORBED DEPRECIATION PERTAINING TO A.YRS 1995 - 96 AND 1997 - 98 , WHIL E MAKING OTHER ADDITIONS. WE FIND THAT THE LD. AO NOTICED FROM F ORM 3CD FURNISHED BY THE ASSESSEE THAT UNABSORBED DEPRECIATION BEING CARRIED FORWARD TILL A.Y.2009 - 10 WAS RS.50,76,21,352/ - . THE ASSESSEE FURNISHED THE YEAR WISE BREAK - UP OF UNABSORBED DEPRECI ATION CARRIED FORWARD. THE LD. AO ON GOING THROUGH THE DETAILS, NOTICED THAT AN AMOUNT OF RS.7,50,12,769/ - PERTAINED TO A.Y.1995 - 96 AND RS.4,72,12,935/ - PERTAINED TO A.Y.1996 - 97. THE LD. AO BY PLACING RELIANCE ON THE DECISION OF SPECIAL BENCH OF MUMBAI TRI BUNAL IN THE CASE OF DCIT VS. TIMES GUARANTY LTD. REPORTED IN 40 SOT 14 HELD THAT THE UNABSORBED DEPRECIATION PERTAINING TO A.YRS 1995 - 96, 1996 - 97 COULD BE SET OFF ONLY UP TO 2004 - 05 AND NOT THEREAFTER. ACCORDINGLY, HE CONCLUDED THAT ASSESSEE CANNOT BE ALL OWED TO CARRY FORWARD THE UNABSORBED DEPRECIATION AMOUNTING TO RS.12,22,25,704/ - PERTAINING TO A.YRS1995 - 96 AND 1997 - 98 BEYOND A.Y.2004 - 05. THE LD. CIT(A) BY PLACING RELIANCE ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF GENERAL MOTORS INDIA PVT. LTD. ITA NO.4343/MUM/2018 M/S. AMIT SPINNING INDUSTRIES LTD. 3 VS. DCIT REPORTED IN 257 CTR 123 WHEREIN THE SIMILAR ISS UE HAD COME UP FOR ADJUDICATION, GRANTED RELIEF TO THE ASSESSEE. WE FIND THAT THE HONBLE GUJARAT HIGH COURT HAD ADJUDICATED THE VERY SAME ISSUE IN DISPUTE BEFORE US AND ULTIMATELY CONCLUDE D THAT UNABSORBED DEPRECIATION OF EARLIER YEARS PRIOR TO A.Y.2001 - 02 WOULD BE ELIGIBLE TO BE CARRIED FORWARD AND SET OFF AFTER A PERIOD OF 8 YEARS WITHOUT ANY TIME LIMIT WHATSOEVER IN ACCORDANCE WITH SECTION 32(2) OF THE ACT AS AMENDED BY THE FINANCE ACT 2 001. RESPECTFULLY FOLLOWING THE AFORESAID GUJARAT HIGH COURT DECISION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) GRANTING RELIEF TO THE ASSESSEE. 4. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT O N THIS 11 / 12 /201 9 SD / - ( MAHAVIR SINGH ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 11 / 12 / 2019 KARUNA , SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( AS STT. REGISTRAR) ITAT, MUMBAI 1. TH E APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// ITA NO.4343/MUM/2018 M/S. AMIT SPINNING INDUSTRIES LTD. 4 DATE INITIAL 1. DRAFT DICTATED ON 09/12/2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 10/12/2019 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 11. DICTATION PAD IS ENCLOSED YES