The ITO, Ward-3(1), JAMNAGAR V. Integrated Proteins Ltd., JAMNAGAR

ITA 470/RJT/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2262 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-01-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 01-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Assessee Lawyers: MJ RANPURA
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE: S H RI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] THE ITO, WARD - 3(1), JAMNAGAR (APPELLANT) VS INTEGRATED PROTEINS LTD, CITY POINT, OPP. TOWN HALL, JAMNAGAR PAN: AAACI7932G (RESPONDENT) REVENUE BY : S H RI C.S. ANJARIA , D . R. ASSESSEE BY: S H RI M.J. RANPURA , A.R. DATE OF HEARING : 19 - 01 - 2 016 DATE OF PRONOUNCEMENT : 23 - 02 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS REVENUE'S APPEAL FOR A.Y. 2012 - 13, ARISES FROM ORDER OF THE CIT(A), JAMNAGAR DATED 13 - 05 - 2014 IN APPEAL NO. CIT(A)/JAM/159/13 - 14/265, IN PROCEEDINGS UNDER SECTION 154 OF THE INCOME TAX ACT, 1961; IN SHORT 'THE ACT'. I T A NO . 470 / RJT /20 14 A SSESSMENT YEAR 2012 - 13 I.T.A NO. 4 7 0 /RJT /20 1 4 A.Y. 20 12 - 13 PAGE NO ITO VS. INTEGRATED PROTEINS LTD 2 2. THE REVENUE'S SOLE SUBSTANTIVE GROUND CHALLENGES THE CIT(A)'S ORDER ALLOWING ASSESSEE'S RECTIFICATION SEEKING TO SET OFF ITS BROUGHT FORWARD LOSSES ON ACCOUNT OF UNABSORBED DEPRECIATION AGAINST THE RELEVANT PREVIOUS YEAR'S INCOME FROM SHORT TERM CAPITAL GA INS OF RS. 1,14,08,609 / - . IT IS TO BE SEEN THAT DEPARTMENT CENTRALIZED PROCESSING CENTRE PROCESSED ASSESSEE'S RETURN ON 17 - 12 - 2013 THEREBY RAISING DEMAND OF RS. 43,11,050 / - . THE ASSESSEE SOUGHT ITS RECTIFICATION BY PLEADING FOR SET OFF OF ITS BROUGHT FORWAR D DEPRECIATION OF RS. 1,14,08,610 / - . THE CIT(A) RECORDS IN HIS ORDER THAT THE CPC DID NOT CONSIDER THE SAME. 3. WE COME TO THE LOWER APPELLATE PROCEEDINGS IN ASSESSEE'S APPEAL NOW. IT PLACED ON RECORD FIRST OF ALL DETAILS OF ITS UNABSORBED DEPRECIATION/BUSINESS LOSSES INCURRED SINCE ASSESSMENT YEAR 2004 - 05. IT THEREAFTER PLEADED INTER ALIA THAT HON'BLE DELHI HIGH COURT IN ESCORTS ELECTRONICS LTD VS. CIT (2002) 258 ITR 23 (DEL) ALLOWS SUCH A SET OFF OF DEPRECIATION AGAINST INCOME FROM OTHER SOURCES. IT FURTHER QUOTED ANOTHER CASE LAW OF PERFECT PHARMACIST PVT. LTD VS. JCIT (2004) 140 TAXMANN 49 (IND - TRIB) TO THE FA CT THAT SUCH A DEPRECIATION CAN BE FURTHER ADJUSTED AGAINST SHORT TERM CAPITAL GAINS. THE ASSESSEE'S NEXT CONTENTION BEFORE THE CIT(A) WAS THAT AN UNABSORBED DEPRECIATION IS ALLOWABLE TO BE SET OFF EVEN IF RETURN NOT FILED IN TIME AS HELD BY THE TRIBUNAL I N ACIT VS. JUPITER BIO - SCIENCE LTD (2006) 06 SOT 212 (BANG). ITS FURTHER ARGUMENT WAS THAT SECTION 80 OF THE ACT DID NOT APPLY IN CASE OF AN UNABSORBED DEPRECIATION OF THIS KIND. THE ASSESSEE'S LAST SUBMISSION WAS THAT THE CIT(A) IN ITS OWN I.T.A NO. 4 7 0 /RJT /20 1 4 A.Y. 20 12 - 13 PAGE NO ITO VS. INTEGRATED PROTEINS LTD 3 CASE ASS ESSMENT YEAR 2007 - 08 AS DECIDED ON 05 - 10 - 2013 HAD ALREADY ALLOWED A SIMILAR SET OFF OF BROUGHT FORWARD UNABSORBED DEPRECIATION BY HOLDING THAT SECTION 32(2) OF THE ACT NO MORE PRESCRIBE ANY TIME LIMIT FOR THE IMPUGNED RELIEF. THE CIT(A) IN HIS ORDER, ALTHO UGH NON - SPEAKING, ACCEPTS THE ASSESSEE'S RECTIFICATION IN QUESTION. THIS LEAVES THE ASSESSEE AGGRIEVED. 4. WE HAVE HEARD BOTH THE PARTIES. CASE FILE PERUSED. THE REVENUE'S FIRST ARGUMENT ASSAILS CIT(A) NON - SPEAKING ORDER MERELY HOLDING THAT SUCH AN ADJUSTM ENT DENYING BROUGHT FORWARD LOSSES CANNOT BE MADE U/S. 143(1). WE PUT UP A SPECIFIC QUERY AS TO WHETHER THE ASSESSEE'S ABOVE STATED ARGUMENT ON MERITS MADE IN THE LOWER APPELLATE PROCEEDINGS AS NARRATED HEREINABOVE ARE NOT ACCEPTABLE ON MERITS IN ANY CASE. THE REVENUE IS UNABLE TO REBUT THE SAME. WE IGNORE ITS TECHNICAL SUBMISSION ACCORDINGLY. THE REVENUE'S GROUNDS NOWHERE CHALLENGE THE LOWER APPELLATE ORDER ON LEGALITY ON MERITS. THERE IS NO DISPUTE THAT SECTION 32(2) OF THE ACT TREATS UNABSORBED BROUGHT F ORWARD DEPRECIATION AS THAT OF THE CURRENT ASSESSMENT YEAR. THE REVENUE NOWHERE CONTRADICTS DEPRECIATION FIGURE GIVEN HEREINABOVE. WE HOLD IN THESE FACTS THAT SINCE THE CPC HAD NOT ACCEPTED THE ASSESSEE'S CLAIM, IT RIGHTLY FILED THE IMPUGNED RECTIFICATION PETITION SEEKING TO ADJUST ITS BROUGHT FORWARD LOSS ON ACCOUNT OF UNABSORBED DEPRECIATION (SUPRA) BY TAKING RECOURSE TO SECTION 154 OF THE ACT. ITS STATUTORY REMEDY PROVIDES IN THE ACT. WE DO NOT FIND ANYWHERE THAT CPC'S PROCESSING U/S. 143(1) STANDS AS AN I.T.A NO. 4 7 0 /RJT /20 1 4 A.Y. 20 12 - 13 PAGE NO ITO VS. INTEGRATED PROTEINS LTD 4 EXCEPTION THERETO. WE REJECT REVENUE'S SOLE SUBSTANTIVE GROUND ACCORDINGLY. 5. THIS REVENUE'S APPEAL IS ACCORDINGLY DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 23 - 02 - 201 6 SD/ - SD/ - ( PRAMOD KUMAR ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 23 /02 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, RAJKOT