The DCIT(OSD), Circle-8, Ahmedabad V. M/s. Traders Pvt.Ltd., Ahmedabad

ITA 905/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1614 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 17-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 03-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANILKUMAR BHARADWAJ
• Keywords: Depreciation; Unabsorbed depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 905/AHD/2013 (ASSESSMENT YEAR: 2009-10) THE DCIT (OSD) CIRCLE-8, AHMEDABAD V/S M/S. TRADERS PRIVATE LTD. 1 ST FLOOR, SAMBHAV HOUSE, BODAKDEV, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAACT3962B APPELLANT BY : SHRI ANIL KUMAR BHARADWAJ, SR. D.R. RESPONDENT BY : NONE ( )/ ORDER DATE OF HEARING : 16 -05-201 6 DATE OF PRONOUNCEMENT : 18 -05-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF LD. CIT(A)-XIV, AHMEDABAD DATED 24.01.2013 PERTAINING T O A.Y. 2009-10. 2. THE SUBSTANTIVE GRIEVANCE OF THE REVENUE READ AS UN DER:- ITA NO. 905/ AHD/2013 . A.Y. 2009-1 0 2 1. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV , AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE PRIOR PER IOD EXPENDITURE AMOUNTING TO RS.2,12,526/- WHEN ASSESSEE FOLLOWS ME RCANTILE SYSTEM OF ACCOUNTING & THE EXPENSES HAD ALREADY CRYSTALISED D URING THE EARLIER ASSESSMENT YEARS. 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XIV, A HMEDABAD HAS ERRED IN LAW AND ON FACTS IN ALLOWING CARRY FORWARD OF UNABSORBED DEPRECIATION AMOUNTING TO RS.73,09,437/-. 3. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEE DINGS, THE A.O FOUND THAT THE ASSESSEE HAS CLAIMED EXPENDITURE OF RS. 2,12,526/- AND ON THE ANALYSIS OF THE DETAILS, THE A.O FOUND THAT THE EXPENDITURE PERTAINS TO THE PERIOD BEFORE 31.03.2009. TREATING THE SAME AS PRIOR PERIOD EXPENDITURE DISALLOWANCE OF RS. 2,12,526/- W AS MADE. 4. BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE STATED THAT SINCE THE A.O. HAS NOT DISPUTED THAT THE EXPENDITURE WAS NOT DEDUCTIBLE. THE ONLY DISPUTE RELATES TO THE YEAR OF DEDUCTIBILITY A ND SINCE THE ASSESSEE HAS NOT BENEFITTED IN TAXES, THERE IS NO CAUSE FOR DISALLOWANCE. RELIANCE WAS PLACED ON THE DECISION OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF M/S. VISHNU INDUSTRIAL GASES PVT. LT D. IN TAX APPEAL NO. 229/1988 DATED 06.05.2008 AND ALSO ON THE DECISION OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF NAGRI MILLS 33 ITR 681. 5. AFTER CONSIDERING THE FACTS AND THE DECISIONS RELIE D UPON BY THE ASSESSEE, THE LD. CIT(A) HELD AS UNDER:- 3.3 DECISION : I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AN D THE SUBMISSION MADE BY THE APPELLANT DURING THE COURSE OF APPELLAT E PROCEEDINGS. THE ITA NO. 905/ AHD/2013 . A.Y. 2009-1 0 3 FACT REMAINS THAT THE GENUINENESS OF EXPENDITURE HA S NOT BEEN DISPUTED. IT IS CONCLUDED BY THE AO THAT THE EXPEND ITURE SHOULD HAVE BEEN CLAIMED IN A. Y. 2008-09. HOWEVER, AS PER FACT S THERE IS NO POSTPONEMENT OF LIABILITY BY THE APPELLANT. HAVING NOT CLAIMED EXPENDITURE IN A. Y. 2008-09, THE APPELLANT HAS PAI D MORE INCOME TAX IN A. Y. 2008-09. IN VIEW OF RATIO LAID DOWN BY HON BLE BOMBAY HIGH COURT DECISION IN THE CASE OF CIT VS. NAGRI MILLS R EPORTED IN 33 ITR 681 (BOM), THE DISALLOWANCE MADE BY THE AO IS DIRECTED TO BE DELETED AND THE GROUNDS OF APPEAL ARE ACCORDINGLY ALLOWED. 6. BEFORE US, THE LD. D.R. PLACED STRONG RELIANCE ON T HE FINDINGS OF THE A.O. 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORI TIES BELOW. WE FIND FORCE IN THE CLAIM OF THE ASSESSEE THAT THE GENUINE NESS OF THE EXPENDITURE WAS NOT IN DISPUTE BUT ONLY THE YEAR OF DEDUCTIBILITY WAS IN QUESTION. THE RATIO LAID DOWN BY THE HONBLE HIGH C OURT OF BOMBAY IN THE CASE OF NAGRI MILLS (SUPRA) SQUARELY APPLY ON T HE FACTS OF THE CASE WHICH HAS BEEN FOLLOWED BY THE LD. CIT(A). WE, THER EFORE, DO FIND ANY ERROR OR INFIRMITY IN THE FINDINGS OF THE LD. CIT ( A). GROUND NO. 1 IS ACCORDINGLY DISMISSED. 8. WHILE SCRUTINIZING THE RETURN OF INCOME, THE A.O. F URTHER NOTICED THAT THE ASSESSEE HAS CLAIMED SET OFF OF BROUGHT FORWARD UNABSORBED DEPRECIATION. ON VERIFICATION, THE A.O FOUND THAT O UT OF TOTAL BROUGHT FORWARD UNABSORBED DEPRECIATION OF RS. 93,16,089/-, RS. 20,91,137/- AND RS. 25,79,982/- PERTAINS TO THE PERIOD RELEVANT TO ASSESSMENT YEAR 1999-2000 & 2000-01. ITA NO. 905/ AHD/2013 . A.Y. 2009-1 0 4 9. THE ASSESSEE WAS ASKED TO SHOW CAUSE WHY SUCH UNABS ORBED DEPRECIATION SHOULD NOT BE DISALLOWED. IN ITS REPLY , THE ASSESSEE HEAVILY RELIED UPON THE PROVISIONS OF SECTION 72 & 73 OF THE ACT. THE A.O RUBBISHED THE CLAIM OF THE ASSESSEE. PLACING RE LIANCE ON THE DECISION OF THE TRIBUNAL SPECIAL BENCH IN THE CASE OF TIMES GUARANTY LTD., THE CLAIM OF SET OFF UNABSORBED DEPRECIATION WAS DENIED BY THE A.O. 10. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND REITERATED ITS CLAIM. IT WAS STRONGLY CONTENDED THAT THE DECIS ION OF THE SPECIAL BENCH IN THE CASE OF TIMES GUARANTY LTD. IS NO LONG ER A GOOD LAW BY THE DECISION OF THE HONBLE HIGH COURT OF GUJARAT G IVEN IN THE CASE OF GENERAL MOTOR INDIA. PVT. LTD. IN SPECIAL CIVIL APP LICATION NO. 173 OF 2012 VIDE ORDER DATED 23.08.2012. 11. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, TH E LD. CIT(A) HELD AS UNDER:- 4.3 DECISION : I HAVE CAREFULLY CONSIDERED THE ASSESSMENT ORDER AN D THE SUBMISSION MADE BY THE APPELLANT DURING THE COURSE OF APPELLAT E PROCEEDINGS. THE AO HAS FOLLOWED THE DECISION IN THE CASE OF HON'BLE ITAT MUMBAI BENCH 'E' (SPECIAL BENCH) IN THE CASE OF DEPUTY COM MISSIONER OF INCOME-TAX, CIRCLE 1(3), MUMBAI VS TIMES GUARANTY L TD. HOWEVER, SINCE THERE IS A CLEAR JUDGMENT FROM THE JURISDICTI ONAL HIGH COURT [SCA NO. 173 OF 2012] IN THE CASE OF GENERAL MOTOR INDIA PVT. LTD. VS. DCIT DATED 23/08/2012, I ORDER THE AO TO FULLY ALLOW THE CARRY FORWARD OF UNABSORBED DEPRECIATION OF RS. 73,09,437/- AND NOT RESTRICT IT TO RS. 24,71,008/-. THE APPELLANT, THEREFORE, GETS A RELIE F OF RS. 48,38,429/-. THE GROUNDS OF APPEAL ARE ACCORDINGLY ALLOWED. ITA NO. 905/ AHD/2013 . A.Y. 2009-1 0 5 12. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FAC TS IN ISSUE BEFORE US. THE DECISION RELIED UPON BY THE A. O IS CONTRARY TO THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT W HICH HAS BEEN FOLLOWED BY THE LD. CIT(A). THEREFORE, NO INTERFERE NCE IS CALLED FOR. GROUND NO. 2 IS DISMISSED. 13. IN THE RESULT, THE APPEAL FILED BY THE REVENU E IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 18 - 05 - 2016 . SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD