ACIT CEN CIR 36, MUMBAI V. JANAK HOLDING P.LTAD, MUMBAI

ITA 4684/MUM/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3459 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2010-2011
• Appeal Filed On: 09-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS LATA SUNDAR
• Keywords: Depreciation; Unabsorbed depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL J, BENCH MUM BAI BEFORE SHRI RAJENDRA, AM AND SHRI RAM LAL NEGI, JM ./ ITA NO.4684/MUM/2014 ( / ASSESSMENT YEAR: 2010-2011) ACIT/DCIT, CC-36, MUMBAI-20 VS. M/S JANAK HOLDING PVT. LTD., 217, COMMERCE HOUSE, 140, N.M.ROAD, FORT, MUMBAI-400006 ./ ! ./ PAN/GIR NO. : AAACJ 1074 A ( ' / APPELLANT ) .. ( #$' / RESPONDENT ) % %% % & & & & /REVENUE BY : MRS. LATA SUNDAR '( % %% % & & & & /ASSESSEE BY : NONE % () / DATE OF HEARING : 18/01/2016 *+ % () / DATE OF PRONOUNCEMENT 22/01/2016 ,- ,- ,- ,- / O R D E R PER RAM LAL NEGI (J.M) : THIS APPEAL HAS BEEN DIRECTED AGAINST ORDER DATED 2 4-3-2014, PASSED BY THE CIT(A)-41, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2010-2011. THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER ON THE FOLLOWING EFFECTIVE GROUND:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN ALLOWING THE ASSESSE E SET OFF OF THE CARRY FORWARD OF LOSSES DESPITE BEING AWARE OF THE FACT T HAT THE ASSESSEE FILED THE RETURN INCOME AFTER THE DUE DATE FOR FILING THE RETURN OF INCOME. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY BEING ENGAGED IN BUSINESS AS BUILDER AND DEVELOPER, FILED ITS RETURN OF INCOME ON 30-9-2011 DECLARING NIL INCOME. THE RETURN WAS PROCESSED AND AFTER ITA NO.4684/14 2 HEARING THE ASSESSEE THE AO INTER ALIA DISALLOWED T HE ASSESSEES CLAIM OF DEPRECIATION OF RS.28,77,666/- ON THE WIND TURBINE GENERATOR VIDE ASSESSMENT ORDER DATED 28.02.2013. 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), INTER ALIA ON THE GROUND THAT THE AO HAS WRONGLY DISALLOWED THE SET OFF OF BROUGHT FORWARD UNABSORBE D DEPRECIATION. THE CIT(A) SOUGHT REPORT FROM AO, HOWEVER, WHEN HE DID NOT RECEIVE ANY RESPONSE FROM THE AO, HEARD THE ASSESSEE . THE ASSESSEE PLEADED THAT THE PROVISIONS OF SECTION 80 OF THE INCOME TAX ACT, 196 1(IN SHORT THE ACT) ARE APPLICABLE ONLY IN CASE OF CARRY FORWARD OF BUSINES S LOSS AND THAT THE CARRY FORWARD OF UNABSORBED DEPRECIATION IS GOVERNED BY T HE PROVISIONS OF SECTION 32(2) OF THE ACT. THERE IS NO REQUIREMENT OF FILING RETURN WITHIN THE TIME PRESCRIBED U/S.139(L) FOR CLAIMING CARRY FORWARD AN D SET OFF OF UNABSORBED DEPRECIATION. CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THE CI T(A) ALLOWED THE AFORESAID GROUND OF APPEAL HOLDING THAT THE LOSS OF RS.18,95,911/- RETURNED BY THE APPELLANT IS ON ACCO UNT OF UNABSORBED DEPRECIATION AND THE SAME NEEDS TO BE ALLOWED TO BE CARRIED FORWARD U/S.32(2) OF THE ACT AND ACCORDINGLY DIRECTED THE AO TO ALLOW SET OFF OF UNABSORBED DEPRECIATION AS DETERMINED UPON ADJUDICATION OF TH E APPEAL FILED BY THE APPELLANT FOR AY.2009-10 4. DISSATISFIED WITH THE IMPUGNED ORDER PASSED BY T HE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. ITA NO.4684/14 3 5. BEFORE US, LD. DR HEAVILY RELYING ON THE ASSESSM ENT ORDER SUBMITTED THAT THE ALLEGED LOSS OF THE ASSESSEE IS A BUSINESS LOSS AND THE ASSESSEE HAS FAILED TO FILE THE RETURN WITHIN THE P RESCRIBED LIMIT U/S.139 (1) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AN D THEREFORE, THE ASSESSEE IS NOT ENTITLED TO CARRY FORWARD THE LOSS UNDER SECTION 80 OF THE ACT. 6. WE HAVE HEARD THE SUBMISSIONS THE LD. DR AND GON E THROUGH THE MATERIAL PLACED BEFORE US. WE FIND THAT THE AO HAS DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE COM PANY HAS NOT FILED ITS RETURN WITHIN THE TIME PRESCRIBED UNDER SECTION 139(1) OF THE ACT AND THEREFORE, AS PER SECTION 80 OF THE ACT SUCH LOSSES CANNOT BE CARRIED FORWARD. ON THE OTHER HAND THE LD. CIT(A) HAS ALLOW ED THE CLAIM OF THE ASSESSEE HOLDING THAT SECTION 80 OF THE ACT DOES NO T APPLY IN CASE OF UNABSORBED DEPRECIATION. 6. IN OUR CONSIDERED OPINION, THE LD. CIT(A) HAS RI GHTLY POINTED OUT THAT AO HAS WRONGLY DISALLOWED THE DEPRECIATION CAR RIED FORWARD TO SET OFF BY TREATING THE SAME AS BUSINESS LOSS. THE CONDITIO NS UNDER SECTION 80 OF THE ACT THAT THE RETURN OF LOSS MUST BE FILED IN AC CORDANCE WITH SECTION139 (1) AND LOSS MUST BE DETERMINED IN PURSUANCE OF THE RETURN AS A CONDITION PRECEDENT TO CARRY FORWARD AND SET OFF THE LOSS APP LY TO BUSINESS LOSSES AND NOT TO THE UNABSORBED DEPRECIATIONS. HENCE, THE LD. CIT(A) HAS RIGHTLY HELD THAT THE LOSS IN QUESTION IS AN UNABSORBED DEP RECIATION AND NOT A BUSINESS LOSS, THEREFORE, SECTION 80 DOES NOT APPLY IN CASE OF ITA NO.4684/14 4 UNABSORBED DEPRECIATION. IN THE PRESENT CASE SINCE THE ASSESSEE HAS CLAIMED DEPRECIATION ON THE WIND TURBINE GENERATOR THE SAME CANNOT BE TREATED AS BUSINESS LOSS AND HENCE ENTITLED TO CARR Y FORWARD THE DEPRECIATION UNDER SECTION 32(2) OF THE ACT. THE HO N,BLE KARNATAKA HIGH COURT IN BRAHMAVARA V. CIT (1999) 239 ITR 867 HAS H ELD THAT THE CONDITION IN SECTION 80 REGARDING FURNISHING OF RET URN BY THE ASSESSEE FOR THE CONCERNED YEAR WITHIN THE TIME SPECIFIED UNDER SECTION139(1) IN ORDER TO BE ENTITLED TO CARRY FORWARD APPLIES TO BUSINESS LOSS AND NOT TO UNABSORBED DEPRECIATION. THEREFORE, UNABSORBED DEPR ECIATION UNDER SECTION 32(2) CAN BE CARRIED FORWARD EVEN IF THE RE TURN FOR THE CONCERNED YEAR IS FILED BEYOND THE TIME SPECIFIED UNDER SECTI ON139(1) OF THE ACT. 8. IN VIEW OF THE EXPRESSED PROVISIONS OF THE LAW A ND THE RATIO LAID DOWN IN BRAHMAVARA V. CIT (SUPRA), WE DO NOT FIND A NY REASON TO INTERFERE WITH THE IMPUGNED ORDER. ACCORDINGLY, ORDER DATE 24 -3-2014 PASSED BY THE LD. CIT(A) IS UPHELD AND THE GROUND OF APPEAL O F THE REVENUE IS DISMISSED BEING DEVOID OF ANY MERIT. 9. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISM ISSED. ' (. % ' % ( /0 ORDER PRONOUNCED IN THE OPEN COURT ON 22/01/2016. ,- % *+ 1 2,. + % 3 SD/- SD/- (RAJENDRA) (RAM LAL NEGI) , , , , / ACCOUNTANT MEMBER , , , , / JUDICIAL MEMBER MUMBAI ; 2, DATED 22 /01/2016 #. . /PKM , . / PS ITA NO.4684/14 5 ,- ,- ,- ,- % %% % #(5 #(5 #(5 #(5 65( 65( 65( 65( / COPY OF THE ORDER FORWARDED TO : ,- ,- ,- ,- / BY ORDER, 7 77 7 / / / / / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. ' / THE APPELLANT 2. #$' / THE RESPONDENT. 3. 8 ( ) / THE CIT(A), MUMBAI. 4. 8 / CIT 5. 593 #( , , / DR, ITAT, MUMBAI 6. 3: ; / GUARD FILE. $5( #( //TRUE COPY//