ITO 4(3)(2), MUMBAI V. RINKU POLYCHEM LTD, MUMBAI

ITA 749/MUM/2013

• Counselvise Citation: 74919914 RSA 2013
• Duration Of Justice: 1 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 04-08-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 29-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C TRIPURA SUNDARI
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NOS. 748, 749 & 750/MUM/2013 ASSESSMENT YEARS: 2005-06, 2006-07 & 2007-08 ITO 4(3)(2) R. NO. 648, 6 TH FLOOR, AAYAKAR BHAVAN, MUMBAI-20 VS. M/S. RINKU POLYCHEM LTD. GOPAL BHAVAN, 2 ND FLOOR, 1 ST BHANDANI PRESS LANE, KADGADI, MUMBAI- 400 002 (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :- AAACR 0496 A ASSESSEE BY : NONE REVENUE BY : SMT. C. TRIPURA SUNDARI DATE OF HEARING : 04.08.2014 DATE OF PRONOUNCEMENT : 27.08.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THESE APPEALS FILED BY THE REVENUE ARE DIRECTED AG AINST THE ORDERS OF THE LD.CIT(A)-08, MUMBAI, ALL DATED 12.11.2012, FOR THE ASSESSMENT YEARS 2005-06, 2006-07 & 2007-08. 2. THE ONLY ISSUE INVOLVED IN ALL THE THREE APPEALS RELATE TO THE DECISION OF THE LD.CIT(A) GRANTING SE-OFF OF UNABSORBED DEPRECIATIO N PERTAINING TO THE A.Y. 1997-98 WHICH WAS CARRIED FORWARD FOR SET OFF IN SUBSEQUENT YEARS. 3. BRIEFLY STATED, THE ASSESSEE, IN ALL THE THREE Y EARS FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME AT NIL AFTER CLAIMING SE T OFF OF UNABSORBED DEPRECIATION RELATED TO THE ASSESSMENT YEAR 1997-98 WHICH WAS CA RRIED FORWARD FOR SET OFF IN SUBSEQUENT YEARS. THE AO DISALLOWED THE CLAIM OF TH E ASSESSEE BY RELYING ON THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN TH E CASE OF DCIT VS. TIMES GUARANTEE LTD. 41 ITR 193. ON APPEAL, THE LD.CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE BY RELYING ON THE DECISION OF GUJARAT HIGH COURT DATED 23.08.2012 IN THE ITA NOS. 748, 749 & 750/MUM/2013 M/S. RINKU POLYCHEM LTD. ASSESSMENT YEARS: 2005-06, 2006-07 & 2007-08 2 CASE OF GENERAL MOTORS PVT. LTD. VS. DCIT . AGGRIEVED BY THE IMPUGNED DECISION, THE REVENUE IS IN APPEAL BEFORE US. 4. NO ONE HAS APPEARED FOR THE ASSESSEE AND WE, THE REFORE, PROCEED TO DECIDE THE APPEAL OF THE REVENUE EX PARTE AFTER CONSIDERIN G THE SUBMISSIONS OF THE LEARNED DR AND ALSO PERUSING THE ORDERS OF LOWER AUTHORITIE S. IT IS THE CONTENTION OF THE LD. DR THAT THE LD.CIT(A) OUGHT TO HAVE APPLIED THE PRO VISIONS AS APPLICABLE TO THE ASSESSMENT YEAR IN WHICH THE SET OFF IS BEING SOUGH T IN THE LIGHT OF THE AMENDMENTS MADE TO SECTION 32(2) OF THE ACT W.E.F. 01.04.2002. THEREFORE, THE IMPUGNED ORDER OF THE LD.CIT(A), ACCORDING TO THE REVENUE IS CONTR ARY TO LAW. THE LD.DR, IN SUPPORT OF THE CASE OF THE REVENUE, HAS RELIED ON THE DECIS IONS OF THE MADRAS HIGH COURT IN THE CASES OF CIT VS. RPIL SIGNALING SYSTEMS LTD, 328 ITR 283 AND CIT VS. PIONEER ASIA PACKING (P) LTD, 310 ITR 198 . IN THIS REGARD, IT IS RELEVANT TO STATE THAT THE HIGH COURT OF GUJARAT IN THE CASE OF GENERAL MOTORS INDIA PVT. LTD. (SUPRA) HAS HELD THAT THE PROVISIONS OF SECTION 32(2) AS AMENDED BY FINAN CE ACT (NO. 1), 2001 WOULD ALLOW THE UNABSORBED DEPRECIATION ALLOWANCE AVAILAB LE IN AYS 1997-98 TO 2001-02 TO BE CARRIED FORWARD TO THE SUCCEEDING YEARS, AND IF ANY UNABSORBED DEPRECIATION OR PART THEREOF COULD NOT BE SET OFF TILL THE AY 2002- 03, THEN IT WOULD BE CARRIED FORWARD TILL THE TIME IT IS SET OFF AGAINST THE PROFITS AND GAINS OF SUBSEQUENT YEARS, WITHOUT ANY TIME LIMIT WHATSOEVER. ALSO, IT IS RELEVANT TO STATE THAT THE TRIBUNAL, IN VARIOUS CASES INCLUDING THE ONE IN THE CASE OF CONFIDENCE PETROLEUM INDIA LTD. VS. DCIT IN ITA NO. 1937/MUM/2012 , HAS FOLLOWED THE SAID DECISION OF THE GUJARAT HIG H COURT AND DECIDED A SIMILAR ISSUE IN FAVOUR OF THE ASSESS EE. SINCE THE LD.CIT(A) HAS RIGHTLY FOLLOWED THE DECISION OF THE GUJARAT HIGH COURT IN THE CASE OF GENERAL MOTORS INDIA PVT. LTD. FOR ALLOWING THE CLAIM OF THE ASSESSEE, W E DO NOT FIND ANY JUSTIFIABLE REASON TO INTERFERE WITH THE DECISION OF THE LD.CIT(A). 5. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF AUGUST, 2014. SD/- SD/- (RAJENDRA) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 27.08.2014. *SRIVASTAVA ITA NOS. 748, 749 & 750/MUM/2013 M/S. RINKU POLYCHEM LTD. ASSESSMENT YEARS: 2005-06, 2006-07 & 2007-08 3 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR D BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.