THE ACIT-3(1), Indore V. M/s. NMI INDUSTRIES PVT. LTD., Indore

ITA 529/IND/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2797 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-07-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 16-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K G GOYAL
• Assessee Lawyers: C P RAWKA
• Keywords: Depreciation; Assessment record; Capital receipt; Unabsorbed depreciation
• Section: 142(1); 115JB

Judgement Text

NMI INDUSTRIES PVT. LTD ITA NO.453/IND/2016 & 529/IND/2016 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.453/IND/2016 ASSESSMENT YEAR 2010-11 ITA NO.529/IND/2016 ASSESSMENT YEAR 2010-2011 REVENUE BY SHRI K.G. GOYAL , SR.DR ASSESSEE BY SHRI C.P. RA W KA , ,CA DATE OF HEARING 01.11 .2018 DATE OF PRONOUNCEMENT 0 6 .11 .2018 O R D E R PER MANISH BORAD, AM. THE ABOVE CAPTIONED TWO APPEALS ARE FILED AT THE IN STANCE OF THE ASSESSEE AND REVENUE VIDE IITA NO.453/IND/2016&ITA M/S. NMI I NDUSTRIES PVT. LTD, 314 BHAGIRATHPURA, INDORE VS. ITO - 4(1) INDORE (APPELLANT) (RESPONDENT ) PAN NO. AABCN9571B ACIT 3(1), INDORE VS. M/S. NMI INDUSTRIES PVT. LTD, 314 BHAGIRATHPURA, INDORE (APPELLA NT) (RESPONDENT ) PAN NO. AABCN9571B NMI INDUSTRIES PVT. LTD ITA NO.453/IND/2016 & 529/IND/2016 2 NO.529/IND/ 2016 RESPECTIVELY PERTAINING TO SAME AS SESSMENT YEAR 2010-11 ARE DIRECTED AGAINST THE ORDERS OF LD. COMM ISSIONER OF INCOME TAX (APPEALS)-I (IN SHORT LD.CIT(A)], INDO RE DATED 29.02.2016 WHICH ARE ARISING OUT OF THE ORDER U/S 1 43(3) OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) DATED 28.03 .2013 FRAMED BY ITO-4(1), INDORE. 2. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN MA NUFACTURING OF TOR STEELS. NIL INCOME DECLARED AND RETURN WAS FILE D ON 15.10.2010 AFTER SETTING OFF THE CURRENT YEARS INCOME FROM BUS INESS AT RS.74,62,470/- AGAINST THE UNABSORBED BUSINESS LOSS /UNABSORBED DEPRECIATION PERTAINING TO EARLIER YEARS. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143(2) AND 142(1) OF THE AC T WERE SERVED UPON THE ASSESSEE. NECESSARY DETAILS AS REQUIRED W ERE FURNISHED. LD.A.O DISALLOWED THE SELLING AND ADMINISTRATIVE EX PENSES AT RS.5,00,000/- FOR WANT OF NECESSARY DETAILS AND PRO OF. LD.A.O ALSO DENIED THE BROUGHT FORWARD BUSINESS LOSS AND DEPREC IATION CLAIMED BY THE ASSESSEE AT RS.74,53,205/-. LD.A.O OBSERVED THAT THE ASSESSEE WHILE CALCULATING THE BOOK PROFIT HAS NOT INCLUDED THE NMI INDUSTRIES PVT. LTD ITA NO.453/IND/2016 & 529/IND/2016 3 SUNDRY BALANCE WRITTEN OFF AT RS.2,57,30,466/-. HE ACCORDINGLY CALCULATED THE BOOK PROFIT FOR THE PURPOSE OF APPLI CATION U/S 115JB OF THE ACT AT RS. 2,24,33,925/-. 3. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD.CI T(A) AND PARTLY SUCCEEDED. THE LD.CIT(A) CONFIRMED THE DISA LLOWANCE OF EXPENSES AT RS.5,00,000/- AND ALSO CONFIRMED THE BO OK PROFIT OF ADDITION MADE BY THE LD.A.O AND AS REGARDS THE CLAI M OF SET OFF ON UNABSORBED BUSINESS LOSS AND UNABSORBED DEPRECIATIO N DIRECTED THE ASSESSING OFFICER TO VERIFY THE CLAIM AND ALLOW IT AS PER RULES. 4. NOW AGGRIEVED BOTH THE ASSESSEE AND REVENUE IS I N APPEAL BEFORE THE TRIBUNAL. 5. WE WILL FIRST TAKE I.T.A. NO.453/IND/2016 OF THE ASSESSEE RAISING FOLLOWING GROUNDS; 1. THAT THE LEARNED CIT APPEALS ERRED IN LAW AND TH E FACTS OF THE CASE CONFIRMED THE DISALLOWANCE OF RS.5,00,000/- MADE BY ASSESSING OFFICER OUT OF SELLING AND ADMINISTRATIVE EXPENSES ON AD HO C BASIS. THE ACTION OF LEARNED CIT APPEALS IS TOTALLY WRONG ON FACTS OF TH E CASE. 2. THAT THE LEARNED CIT ERRED ON FACTS OF THE CASE CONFIRMED THE ACTION OF ASSESSING OFFICER IN COMPUTING THE BOOK PROFIT UNDE R SECTION 115JB. IN SPITE OF THE FACTS THAT THE ASSESSEE COMPANY PREPAR ED ITS PROFIT AND LOSS A/C AS PER SCHEDULE V OF THE INCOME TAX ACT. NMI INDUSTRIES PVT. LTD ITA NO.453/IND/2016 & 529/IND/2016 4 6. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE REQUE STED FOR NOT PRESSING GROUND NO.1 RELATING TO DISALLOWANCE OF SE LLING AND ADMINISTRATIVE EXPENSES AT RS.5,00,000/-. WE THERE FORE DISMISS ASSESSEES GROUND NO.1 AS NOT PRESSED AND UPHOLD TH E FINDING OF LD.CIT(A) CONFIRMING THE DISALLOWANCE OF SELLING AN D ADMINISTRATIVE EXPENSES ON AD-HOC BASIS AT RS.5,00,000/- BY LD.A.O . IN THE RESULT GROUND NO.1 IS DISMISSED. 7. AS REGARDS GROUND NO.2, LD. COUNSEL FOR THE ASSE SSEE REFERRING TO THE AUDITED BALANCE SHEET SUBMITTED TH AT THE SUNDRY BALANCE WRITTEN OFF WERE UNSECURED LOANS WHICH WER E NOT PAYABLE AND ARE BEING IN THE NATURE OF CAPITAL RECEIPT WOUL D NOT FORM PART OF THE BOOK PROFIT AND THEREFORE LOWER AUTHORITIES ERR ED IN ADDING THE SAME TO THE BOOK PROFIT FOR THE PURPOSE OF CALCULAT ING TAXES U/S 115JB OF THE ACT. IN SUPPORT OF HIS CONTENTION FOLL OWING JUDGMENTS WERE REFERRED AND RELIED; (I) CIT VS CHETAN CHEMICALS PVT. LTD, 267 ITR 770 ( GUJARAT) (II) CIT AND ANR VS. COMPAQ ELECTRIC LTD, 249 CTR 2 14 (KARNATAKA) ( III) CIT VS SHIVALI CONSTRUCTION PVT. LTD, 355 ITR 218(DELHI) (IV) CITVS PRADESHIYA INDUSTRIAL AND INVESTMENT COR PORATION U.P, 95 DTR 421 (ALL.) (V) APPOLLO TYRES VS CIT, 122 TAXMAN 562 NMI INDUSTRIES PVT. LTD ITA NO.453/IND/2016 & 529/IND/2016 5 8. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEM ENTLY ARGUED AND SUPPORTING THE DETAILED FINDING OF LD.CI T(A) REFERRING TO VARIOUS JUDGMENTS CONSIDERED BY HIM. 9. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND ALSO GONE THROUGH THE JUDGMENT S REFERRED AND RELIED BY BOTH THE PARTIES. 10. THE ISSUE TO BE ADJUDICATED IS THAT WHETHER TH E BOOK PROFIT FIGURE ADOPTED BY THE LD.A.O FOR THE PURPOSE OF APP LICATION OF PROVISION OF SECTION 115JB OF THE ACT IS CORRECT. FROM THE PERUSAL OF THE AUDITED PROFIT AND LOSS ACCOUNT AS ON 31.3.2 010 CERTIFIED BY THE AUDITOR SHRI C.P. RAWKA, CA DATED 3.9.2010 WE F IND THAT THE NET PROFIT AFTER PRIOR PERIOD ADJUSTMENT HAS BEEN S HOWN AT RS.74,53,205/- AND TO THIS FIGURE BROUGHT FORWARD L OSS HAVE BEEN ADJUSTED AND THE AMOUNT AVAILABLE FOR APPROPRIATION HAS BEEN SHOWN IN NEGATIVE AT RS.7,91,91,532/-. IN THIS FIG URE OF ACCUMULATED LOSS AN AMOUNT REPRESENTING TO SUNDRY B ALANCE OF UNSECURED LOAN WRITTEN OFF (I.E. INCOME) AT RS.2, 57,30,466/- HAS BEEN REDUCED LEAVING NET CARRY FORWARD LOSS OF RS.5 ,34,61,066/-. 11. FOR THE PURPOSE OF THE APPLICATION OF THE PROVI SION U/S 115JB OF THE ACT EXPLANATION 1 TO THIS SECTION REFERS TO THE BOOK PROFIT WHICH NEEDS TO BE INCREASED BY CERTAIN AMOUNTS AS R EFERRED IN EXPLANATION 1(A) TO (K) AND SIMILARLY THE BOOK PROF IT NEEDS TO BE REDUCED BY CERTAIN AMOUNTS MENTIONED IN EXPLANATION 1(I) TO (VIII) OF NMI INDUSTRIES PVT. LTD ITA NO.453/IND/2016 & 529/IND/2016 6 THE ACT. NOW THESE ADJUSTMENTS OF INCREASE AND DEC REASE ARE TO BE MADE TO THE BOOK PROFIT, WHICH IS THE PROFIT AS S HOWN IN THE STATEMENT OF PROFIT & LOSS ACCOUNT FOR THE RELEVANT PREVIOUS YEAR WHICH IS PREPARED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT GOVERNING, SUCH COMPANIES. FOR BETTER UNDERSTANDIN G WE NEED TO GO THROUGH THE RELEVANT PORTION OF 115JB OF THE ACT WHICH READS AS FOLLOWS; 115JB. (1) NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHE R PROVISION OF THIS ACT, WHERE IN THE CASE OF AN ASSESSEE, BEING A COMPANY, THE INCOME- TAX, PAYABLE ON THE TOTAL INCOME AS COMPUTED UNDER THIS ACT IN RESPECT OF ANY PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR C OMMENCING ON OR AFTER THE 1ST DAY OF APRIL, 2010, IS LESS THAN TEN PER CENT OF ITS BOOK PROFIT, SUCH BOOK PROFIT SHALL BE DEEMED TO BE THE TOTAL INCOME OF THE ASSESSEE AND THE TAX PAYABLE BY THE ASSESSEE ON SUC H TOTAL INCOME SHALL BE THE AMOUNT OF INCOME-TAX AT THE RATE OF EIGHTEEN AND ONE-HALF PER CENT. (2) EVERY ASSESSEE, ( A ) BEING A COMPANY, OTHER THAN A COMPANY REFERRED TO IN CLAUSE ( B ), SHALL, FOR THE PURPOSES OF THIS SECTION, PREPARE IT S 76 [STATEMENT OF PROFIT AND LOSS] FOR THE RELEVANT PREVIOUS YEAR IN ACCORDA NCE WITH THE PROVISIONS OF 76A [PART II OF SCHEDULE VI] TO THE 76B [COMPANIES ACT, 1956 (1 OF 1956)]; OR ( B ) BEING A COMPANY, TO WHICH THE 76C [PROVISO TO SUB-SECTION (2) OF SECTION 211 OF THE 76D [COMPANIES ACT, 1956 (1 OF 1956)] IS APPLICABLE, SH ALL, FOR THE PURPOSES OF THIS SECTION, PREPARE ITS 76E [STATEMENT OF PROFIT AND LOSS] FOR THE RELEVANT PREVIOUS YEAR IN ACCORDANCE WITH THE PROVI SIONS OF THE ACT GOVERNING SUCH COMPANY: PROVIDED THAT WHILE PREPARING THE ANNUAL ACCOUNTS INCLUDING 76E [STATEMENT OF PROFIT AND LOSS], ( I ) THE ACCOUNTING POLICIES; ( II ) THE ACCOUNTING STANDARDS ADOPTED FOR PREPARING S UCH ACCOUNTS INCLUDING 76E [STATEMENT OF PROFIT AND LOSS]; ( III ) THE METHOD AND RATES ADOPTED FOR CALCULATING THE DEPRECIATION, SHALL BE THE SAME AS HAVE BEEN ADOPTED FOR THE PURP OSE OF PREPARING SUCH ACCOUNTS INCLUDING 76E [STATEMENT OF PROFIT AND LOSS] AND LAID BEFORE THE COMPANY AT ITS ANNUAL GENERAL MEETING IN ACCORDANCE WITH THE PROVISIONS OF 76F [SECTION 210] OF THE 76D [COMPANIES ACT, 1956 (1 OF 1956] : NMI INDUSTRIES PVT. LTD ITA NO.453/IND/2016 & 529/IND/2016 7 PROVIDED FURTHER THAT WHERE THE COMPANY HAS ADOPTED OR ADOPTS THE FINANCIAL YEAR UNDER THE 76D [COMPANIES ACT, 1956 (1 OF 1956)], WHICH IS DIFFERENT FROM THE PREVIOUS YEAR UNDER THIS ACT, ( I ) THE ACCOUNTING POLICIES; ( II ) THE ACCOUNTING STANDARDS ADOPTED FOR PREPARING S UCH ACCOUNTS INCLUDING 76E [STATEMENT OF PROFIT AND LOSS]; ( III ) THE METHOD AND RATES ADOPTED FOR CALCULATING THE DEPRECIATION, SHALL CORRESPOND TO THE ACCOUNTING POLICIES, ACCOUN TING STANDARDS AND THE METHOD AND RATES FOR CALCULATING THE DEPRECIATION W HICH HAVE BEEN ADOPTED FOR PREPARING SUCH ACCOUNTS INCLUDING 76E [STATEMENT OF PROFIT AND LOSS] FOR SUCH FINANCIAL YEAR OR PART OF SUCH FINANCIAL YEAR FALLING WITHIN THE RELEVANT PREVIOUS YEAR. EXPLANATION 1 .FOR THE PURPOSES OF THIS SECTION, 'BOOK PROFIT' M EANS THE 77 [PROFIT] AS SHOWN IN THE 76E [STATEMENT OF PROFIT AND LOSS] FOR THE RELEVANT PREVIOUS YEAR PREPARED UNDER SUB-SECTION (2), AS IN CREASED BY XXXXXXXXX - 12. FROM PERUSAL OF THE SUB SECTION 2 OF THE SECTIO N 115 JB OF THE ACT WE OBSERVE THAT THE BOOK PROFIT MEANS THE PROFI T AS SHOWN IN THE STATEMENT OF PROFIT & LOSS ACCOUNT PREPARED FOR THE PREVIOUS YEAR IN ACCORDANCE WITH SCHEDULE-VI OF THE COMPANIE S ACT 1956. THE BONE CONTENTION IN THIS CASE IS ONLY WITH REGAR D TO THE BOOK PROFIT ADOPTED BY LD.A.O. THE ADJUSTMENT OF SUNDRY BALANCE WRITTEN OFF I.E. UNSECURED LOANS NOT PAYABLE, HAVE BEEN ADDED IN THE PROFIT AND LOSS ACCOUNT BELOW THE AMOUNT AVAILABLE FOR APPROPRIATION. NOW WHETHER THIS PARTICULAR AMOUNT OF RS.2,57,30,466/- BEING SUNDRY BALANCE WRITTEN OFF I S A PART OF MISCELLANEOUS RECEIPTS TO BE ADDED `UNDER THE HEAD INCOME WHICH WILL THEREAFTER FORM THE PART OF NET PROFIT BEFORE TAXES OR SAME COULD BE ADJUSTED TO THE AMOUNT AVAILABLE FOR APPROPRIATI ON NEEDS TO BE LOOKED INTO. NMI INDUSTRIES PVT. LTD ITA NO.453/IND/2016 & 529/IND/2016 8 13. THE HON'BLE SUPREME COURT IN THE CASE OF APOLLO TYRES VS CIT 122 TAXMAN 562 WHILE ADJUDICATING SIMILAR TYPE OF I SSUE U/S 115J OF THE ACT HELD THAT THEREFORE, WE ARE OF THE OPINION, THE ASSESSING OFFICER WHILE COMPUTING INCOME U/S 115J HAS ONLY TH E POWER OF EXAMINING WHETHER BOOKS OF ACCOUNTS ARE CERTIFIES B Y THE AUTHORITIES UNDER THE COMPANIES ACT AS HAVING BEEN PROPERLY MAI NTAINED IN ACCORDANCE WITH THE COMPANIES ACT. THE ASSESSING O FFICER THEREAFTER HAS THE LIMITED POWER OF MAKING INCREASES AND REDUC TIONS AS PROVIDED FOR IN THE EXPLANATION TO THE SAID SECTION . TO PUT IT DIFFERENTLY, THE ASSESSING OFFICER DOES NOT HAVE TH E JURISDICTION TO GO BEHIND THE NET PROFIT SHOWN IN THE PROFIT AND LOSS ACCOUNT EXCEPT TO THE EXTENT PROVIDED IN THE EXPLANATION TO SECTION 1 15-J OF THE ACT. 14. EXAMINING THE FACTS OF THE INSTANT APPEAL AND I N THE LIGHT OF THE JUDGMENT OF HON'BLE APEX COURT, WE ARE OF THE V IEW THAT THE BOOK PROFITS IN THE CASE OF THE PRIVATE LIMITED COM PANY ARE TO BE COMPUTED AS PER SCHEDULE-VI OF THE COMPANIES ACT, 1956. NOW WHETHER THE AUDITED BALANCE SHEET OF THE ASSESSEE A S SUBMITTED BEFORE US IS PREPARED AS PER THE SCHEDULE VI OF THE COMPANIES ACT, 1956 NEEDS TO BE EXAMINED. FOR THE INFORMATION PUR POSE WE MENTION BELOW THE FORMAT OF STATEMENT OF PROFIT AND LOSS ACCOUNT PART-II OF SCHEDULE-VI OF THE COMPANIES ACT, 1956 W HICH WAS APPLICABLE IN THE CASE OF ASSESSEE FOR ASSESSMENT Y EAR 2010-11. PART II - FORM OF STATEMENT OF PROFIT AND LOSS NARNE OF THE COMPANY . PROFIT AND LOSS STATEMENT FOR THE YEAR ENDED. NMI INDUSTRIES PVT. LTD ITA NO.453/IND/2016 & 529/IND/2016 9 (RUPEES IN ............ ) PARTICULARS NOTE NO. FIGURES FOR THE FIGURES FOR THE CURRENT REPORTING PREVIOUS PERIOD REPORTING PERIOD 1. REVENUE FROM OPERATIONS XXX XXX II. OTHER INCOME XXX XXX M. TOTAL REVENUE (I + II) XXX XXX IV. EXPENSES: COST OF MATERI ALS CONSUMED XXX XXX PURCHASES OF STOCK - IN - TRADE XXX XXX CHANGES IN INVENTORIES OF XXX XXX FINISHED GOODS WORK - IN - PROGRESS AND STOCK-IN-TRADE EMPLOYEE BENEFITS EXPENSE FINANCE COSTS DEPRECIATION AND AMORTIZATION EXPENSE OTHER EXPENSES TOTAL EXPENSES XXX XXX V. PROFIT BEFORE EXCEPTIONAL AND XXX XXX EXTRAORDINARY ITEMS AND TAX (ILL- IV) NMI INDUSTRIES PVT. LTD ITA NO.453/IND/2016 & 529/IND/2016 10 VI. EXCEPTIONAL ITEMS XXX XXX VII. PROFIT BEFORE EXTRAORDINARY ITEMS XXX XXX AND TAX (V - VI) VIII . EXTRAORDINARY ITEMS XXX XXX IX. PROFIT BEFORE TAX (VII - VIII) XXX XXX X TAX EXPENSE: - (1) CURRENT TAX XXX XXX . (2) DEFERRED TAX XXX XXX XI PROFIT (LOSS) FOR THE PERIOD FROM XXX XXX CONTINUING OPERATIONS (VII-VIII) XII PROFIT/CLOSS) FROM DISCONTINUING XXX XXX OPERATIONS XII I TAX EXPENSE OF DISCONTINUING XXX XXX OPERATIONS XI V PROFIT/CLOSS) FROM DISCONTINUING XXX XXX OPERATIONS (AFTER TAX) (XII-XIII) X V PROFIT (LOSS) FOR THE PERIOD (XI + XXX XXX XIV) X VI EARNINGS PER EQUITY SHARE: (L)BASIC XXX XXX (2)DILUTED XXX XXX NMI INDUSTRIES PVT. LTD ITA NO.453/IND/2016 & 529/IND/2016 11 15. BOOK PROFIT AS MENTIONED IN THE PROVISION 115JB OF THE ACT REFERS TO THE PROFIT BEFORE TAXES WHICH IS ARRIVED AT S.NO. IX OF THE ABOVE REFERRED STATEMENT OF PROFIT AND LOSS ACCOUNT . THE FORMAT OF THE PROFIT & LOSS ACCOUNT IN THE CASE OF THE ASSESS EE AS PLACED ON RECORD BEFORE US DEVIATES FROM THE STANDARDIZED FOR MAT OF STATEMENT OF PROFIT AND LOSS AS PER SCHEDULE-VI OF 1956 AT SO ME PLACES. 16. IN NORMAL PARLANCE SUCH SUNDRY BALANCE WRITTEN OFF WHICH THE ASSESSEE HAS ITSELF ACCEPTED TO BE AN INCOME FORMIN G PART OF THE HEAD INCOME WHEREAS IN AUDITED BALANCE SHEET THE ADJUSTMENT HAS BEEN MADE FROM THE AMOUNT AVAILABLE FOR APPROPR IATION. IN SUCH SITUATION THERE NEEDS PROPER VERIFICATION AT THE END OF THE ASSESSING OFFICER WHO SHALL VERIFY/ EXAMINE THE AUD ITED BALANCE SHEET OF THE ASSESSEE VIS--VIS PART-II OF FORM OF STATEMENT OF PROFIT & LOSS SCHEDULE-VI OF THE COMPANIES ACT, 1956. HE SHOULD ALSO PROCURE CERTIFICATE FROM THE AUDITOR OF THE COMPANY THAT WHETHER THE ADJUSTMENT OF SUNDRY BALANCE WRITTEN OFF IS AS PER SCHEDULE-VI OF THE COMPANIES ACT, 1956 AND THE BOOK PROFIT IN T HE COMPUTATION OF INCOME IS AS PER SCHEDULE-VI OF THE COMPANIES AC T, 1956. LD.A.O SHOULD ALSO GET THE AUDITED BALANCE SHEET VE RIFIED FROM THE OFFICE OF THE REGISTRAR OF COMPANIES UNDER WHOSE JU RISDICTION ASSESSEE COMPANY FALLS SO AS TO GET IT CONFIRMED TH AT THE AUDITED BALANCE SHEET PRODUCED BEFORE THE TRIBUNAL IS AS PE R SCHEDULE-VI OF THE COMPANIES ACT, 1956. IN CASE A POSITIVE REP LY IS RECEIVED IN FAVOUR OF THE ASSESSEE, THEN LD.A.O SHOULD DECIDE A CCORDINGLY AS NMI INDUSTRIES PVT. LTD ITA NO.453/IND/2016 & 529/IND/2016 12 PER LAW. NEEDLESS TO MENTION THAT REASONABLE OPPOR TUNITY OF BEING HEARD SHOULD BE PROVIDED TO THE ASSESSEE. GROUND N O.2 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 17. APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTIC AL PURPOSE. 18. NOW WE TAKE UP REVENUES APPEAL I.T.A. NO.529/I ND/2016 RAISING FOLLOWING GROUND; WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) (I) ERRED IN ALLOWING THE CARRY FORWARD LOSSES & UN ABSORBED DEPRECIATION CLAIMED BY THE ASSESSEE FOR THE A.Y 2008-09 ALTHOUG H NO SUCH CARRY FORWARD LOSS IS ALLOWABLE IN VIEW OF FINDINGS GIVEN BY THE AO AS PER ASSESSMENT ORDER FOR A.Y 2008-09. 19. FROM PERUSAL OF RECORDS WE FIND THAT THE ONLY I SSUE IS SET OFF OF BROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION. WE FIND THAT THE LD.CIT(A) HAS ALREADY DIRECTED THE LD.A.O TO V ERIFY THE CLAIM BROUGHT FORWARD AND THE UNABSORBED DEPRECIATION. W E FIND THAT IN THE RETURN FOR THE YEAR UNDER CONSIDERATION THE APP ELLANT COMPANY HAD SET OFF BROUGHT FORWARD LOSSES AND DEPRECIATION TO THE TUNE OF RS.74,62,470/-. THE SET OFF OF UNABSORBED DEPRECIA TION IS REGULATED BY PROVISION OF SECTION 32(2) OF THE ACT SUBJECT TO THE PROVISION OF SUB-SECTION 72(2) OF SECTION 73(3) OF THE ACT. IT IS ALSO EVIDENT FROM THE PERUSAL OF ASSESSMENT RECORD THAT LEARNED ASSES SING OFFICER HAS NOT GIVEN ANY SPECIFIC FINDING FOR DENYING THE SET OFF OF UNABSORBED LOSS AND UNABSORBED DEPRECIATION. WE, TH EREFORE IN THE INTEREST OF JUSTICE AND IN THE GIVEN FACTS AND CIRC UMSTANCES OF THE NMI INDUSTRIES PVT. LTD ITA NO.453/IND/2016 & 529/IND/2016 13 CASE SET ASIDE THE ISSUES RAISED BY REVENUE TO THE FILE OF LD.A.O FOR AFRESH ADJUDICATION IN THE LIGHT OF PROVISION OF LA W AS APPLICABLE IN THE INSTANT ISSUE I.E. SECTION 32(2) OF THE ACT REA D WITH RESPECT TO 72(2) OF THE ACT. WE ALSO DIRECT THE LEARNED ASSESS ING OFFICER TO VERIFY THE DETAILS OF BROUGHT FORWARD BUSINESS LOSS AND UNABSORBED DEPRECIATION AFTER EXAMINING THE RELEVANT INCOME TA X RETURNS FILED BY THE ASSESSEE FOR THE ASSESSMENT YEARS WHEREIN SU CH CLAIMS HAVE BEEN MADE. NEEDLESS TO MENTION THAT PROPER OPPORTU NITY OF BEING HEARD SHOULD BE PROVIDED TO THE ASSESSEE TO FILE TH E DETAILS MENTIONED HEREIN ABOVE. 20. IN THE RESULT THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. 21. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES AND THAT OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 06.11.2 018. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 06 NOVEMBER, 2018 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE.