Appeal details
Counselvise Citation
[2020] 111 COUNSELVISE.COM (IT) 0802 (ITAT-HYDERABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 1 month(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
11-06-2020
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB-B
Next Hearing Date
27-01-2020
Assessment Year
2008-2009
Appeal Filed On
27-04-2017
Judgement Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.722/HYD/2017 ASSESSMENT YEAR: 2008 - 09 KUMARS METALLURGICAL CORPORATION LIMITED, HYDERABAD. PAN: AAACK 4425 A VS. ACIT, CIRCLE - 2(1), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI P. MURALI MOHANA RAO REVENUE BY: SRI Y.V.S.T. SAI, CIT - DR DATE OF HEARING: 27/01/2020 DATE OF PRONOUNCEMENT: 11 /06/2020 ORDER PER A. MOHAN ALANKAMONY, AM.: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) - 2, HYDERABAD IN APPEAL NO. 0429/2010 - 11, DATED 30/05/2016 PASSED U/S. 143(3) R. W .S 250(6) OF THE ACT FOR THE A.Y. 2008 - 09. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS APPEAL HOWEVER, THE CRUX OF THE ISSUE IS THAT THE LD. CIT (A) HAS ERRED IN UPHOLDING THE ORDER OF THE LD. AO WHO HAD DISALLOWED CARRIED FORWARD & SETOFF OF THE UNABSORBED DEPRECIATION AMOUNTIN G TO RS. 45,52,19,550 RELATING TO THE ASSESSMENT YEAR 2001 - 02 IN THE RELEVANT ASSESSMENT YEAR. 2 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A LIMITED COMPANY ENGAGED IN THE BUSINESS OF PRODUCING AND SELLING SPONGE IRON E - FILED ITS RETURN OF IN COME FOR THE RELEVANT AY 2008 - 09 ON 30/09/2008 ADMITTING LOSS OF RS. 108.27 CRS WHICH INCLUDES DEPRECIATION LOSS. THEREAFTER THE ASSESSEE COMPANY REVISED ITS RETURN OF INCOME ON 09/2/2009 ADMITTING INCOME OF RS. 1,20,02,406 / - BEFORE CLAIMING SET OFF OF CARRY FORWARD LOSSES. SUBSEQUENTLY, THE CASE WAS TAKEN UP FOR SCRUTINY AND ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT ON 31/12/2010 WHEREIN THE LD. AO DISALLOWED CARRY FORWARD AND SETOFF OF THE UNABSORBED DEPRECIATION AMOU NTING TO RS. 45,52,19,550 PERTAINING UP TO THE ASSESSMENT YEAR 2000 - 01. WHILE DOING SO THE LD. AO RELIED ON THE DECISION OF THE SPECIAL BENCH OF THE MUMBAI TRIBUNAL IN THE CASE OF DCIT VS. M/S. TIMES GUARANTEE LIMITED IN ITA NO. 4917 & 4918/MUM/2008 FOR THE AY 2003 - 04 AND 2004 - 05. ON APPEAL, THE LD. CIT (A) UPHELD THE ORDER OF THE LD. AO BY AGREEING WITH HIS VIEW. 4. AT THE OUTSET, THE LD. AR SUBMITTED BEFORE US THAT SUBSEQUENT TO THE DECISION OF THE SPECIAL BENCH OF THE MUMBAI TRIBUNAL CITED SUPRA VARIOUS H IGH COURTS HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE SUCH AS : - (I) HONBLE GUJARAT HIGH COURT IN THE CASE OF GENERAL MOTORS PVT LTD VS. DCIT FOR THE AY 2006 - 07 REPORTED IN 354 ITR 244 IT WAS HELD THAT UNABSORBED DEPRECIATION OF THE AY 1997 - 98 SHALL BE 3 ALLOWED TO BE CARRIED FORWARD AND SET OFF AFTER A PERIOD OF 8 YEARS IN VIEW OF THE AMENDMENT TO SECTION 32(2) OF THE ACT AND ACCORDINGLY THE SAME CAN BE SET OFF IN THE AY 2006 - 07. (II) HONBLE DELHI HIGH COURT IN THE CASE OF DCIT VS. BRITISH MOTOR COMPANY FOR THE AY 2010 - 11 REPORTED IN 400 ITR 569 HELD THAT UNABSORBED DEPRECIATION IS ENTITLED TO BE CARRY FORWARD AND SET OFF AGAINST PROFITS AND GAINS OF SUBSEQUENT YEARS WITHOUT ANY LIMIT WHATSOEVER. 5. THE LD. DR COULD NOT CONTROVERT TO THE SUBMISSION OF THE LD. AR. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. AS POINTED OUT BY THE LD. AR THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE BY VARIOUS HIGH COURTS. THEREFORE, RESPECTFULLY FOLLOWING THE ORDERS OF THE HONBLE HIGH COURT S WE HEREBY HOLD THAT THE ASSESSEE SHALL BE ENTITLED TO SET OFF ITS UNABSORBED DEPRECIATION PERTAINING UP TO THE ASSESSMENT YEAR 2000 - 01 AMOUNTING TO RS. 45,5 2,19,550 IN THE RELEVANT AY. 6. 1 BEFORE PARTING, IT IS WORTHWHILE TO MENTION THAT THIS ORDER IS PR ONOUNCED AFTER 90 DAYS OF HEARING THE APPEAL WHICH IS THOUGH AGAINST THE USUAL NORMS, WE FIND IT APPROPRIATE , TAKING INTO CONSIDERATION OF THE EXTRA - ORDINARY SITUATION IN THE LIGHT OF THE LOCK - DOWN DUE TO COVID - 19 PANDEMIC. WHILE DOING SO, WE HAVE RELIED I N THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. JSW LTD. IN ITA 4 NO.6264/M/2018 AND 6103/M/2018 FOR AY 2013 - 14 ORDER DATED 14TH MAY 2020. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 11 TH JUNE, 2020. SD / - SD/ - (P. MADHAVI DEVI) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 11 TH JUNE, 2020. OKK COPY TO: - 1) M/S. KUMARS METALLURGICAL CORPORATION LTD C/O. P. MURALI & CO, CHARTERED ACCOUNTANTS, 6 - 3 - 655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD - 82. 2) ACIT, CIRCLE - 2(1), HYDERBAD. 3) THE CIT(A) - 2, HYDERABAD 4) THE PR. CIT - 2, HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE
