Satyashodhak Sahakari Bank Ltd., Kolhapur V. Commissioner of Income-tax - 1,

ITA 983/PUN/2014

• Counselvise Citation: 98324514 RSA 2014
• Duration Of Justice: 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 13-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Keywords: Business income; Revision of order; Depreciation; Principle of natural justice; Question of law; Unabsorbed depreciation
• Section: 32; 147; 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.983/PN/2014 ASSESSMENT YEAR: 2009-10 SATYASHODHAK SAHAKARI BANK LTD., 2292, CHOWDHARI WADA, BHAUSINGI ROAD, KOLHAPUR. . APPELLANT PAN: AAAAS9239E VS. THE INCOME TAX OFFICER, WARD 1(1), KOLHAPUR . RESPONDENT APPELLANT BY : SHRI PRAMOD S. SHINGTE RESPONDENT BY : SHRI A.K. MODI DATE OF HEARING : 16-03-2015 DATE OF PRONOUNCEMENT : 25-03-2015 ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT-I, KOLHAPUR, DATED 25.03.2014 RELATING TO ASSESSMENT YEAR 2009-1 0 AGAINST ORDER PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN THE LAW THE LEARNED CIT-I, KOLHAPUR ERRED IN PASSING ORDER U/S 263 OF THE INCOME TAX ACT, 1961 AND THEREBY SETTING ASIDE THE ASSESSMENT ORDER BY TREATING THE SAME AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST O F THE REVENUE BY COMPLETELY DISREGARDING APPELLANTS CONTENTION IN TH IS REGARDS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN THE LAW THE LEARNED CIT-I, KOLHAPUR ERRED IN CONSIDERING THE IN TEREST ON NPA AS DISALLOWABLE ITEM BY COMPLETELY OVERLOOKING JURISDI CTIONAL TRIBUNAL JUDGMENTS REGARDING THE INTEREST ON NPA WHICH ARE I N FAVOR OF THE APPELLANT AND SET ASIDE THE MATTER ONLY ON THE POIN T WHICH IS HIGHLY DEBATABLE. THE APPELLANT CRAVES FOR TO LEAVE, ADD, ALTER, MODI FY, DELETE ABOVE GROUND OF APPEAL BEFORE OR AT THE TIME HEARING, IN THE INT EREST OF NATURAL JUSTICE. 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINS T INVOKING OF JURISDICTION UNDER SECTION 263 OF THE ACT. ITA NO.983/PN/2014 SATYASHODHAK SAH. BANK LTD. 2 4. THE BRIEF FACTS OF THE CASE ARE THAT, THE COMMIS SIONER ON VERIFICATION OF BALANCE SHEET NOTED THAT THE ASSESSEE BANK HAD SHOW N A SUM OF RS.26,82,256/- BEING INTEREST ACCRUED ON OVERDUE LOANS I.E. ON NON -PERFORMING ASSETS (NPAS) AS ON 31.03.2009. THE OPENING BALANCE WAS IN THE S AID ACCOUNT AT RS.20,46,317/-. THUS, ACCRETION OF RS.6,35,939/-, AS PER COMMISSIONER WAS NOT CREDITED TO THE PROFIT & LOSS ACCOUNT FOR THE YEAR UNDER CONSIDERATION. SINCE THE ASSESSEE WAS FOLLOWING THE ACCRUAL METHOD OF ACCOUN TING, THE COMMISSIONER WAS OF THE VIEW THAT ACCRUED INTEREST ON NPAS AMOUN TING TO RS.6,35,939/- WAS REQUIRED TO BE TAXED FOR THE YEAR UNDER CONSIDERATI ON. SHOW CAUSE NOTICE UNDER SECTION 263 OF THE ACT WAS ISSUED TO THE ASSESSEE, AGAINST WHICH THE ASSESSEE FURNISHED WRITTEN SUBMISSIONS, WHICH ARE INCORPORAT ED AT PAGES 2 AND 3 OF THE ORDER PASSED UNDER SECTION 263 OF THE ACT. THE COM MISSIONER WAS OF THE VIEW THAT IN THE WRITTEN SUBMISSIONS, THE ASSESSEE BANK MERELY REITERATED THAT THE INTEREST ON NPA LOANS ACCOUNT WAS NOT TAXABLE AS PE R THE CIRCULARS ISSUED BY THE RBI AND HENCE, THE SAME WAS NOT SHOWN AS INCOME OF THE BANK. THE COMMISSIONER WAS OF THE VIEW THAT THE ORDER PASSED BY THE ASSESSING OFFICER WAS WITHOUT APPLICATION OF MIND AND THE ACCRUED INT EREST ON NPAS REMAINED TO BE TAXED. SINCE NO ENQUIRY IN THIS CASE WAS MADE B Y THE ASSESSING OFFICER, THE COMMISSIONER OBSERVED THAT THE ASSESSMENT ORDER WAS BOTH ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND THE SAME WAS SET-ASIDE TO THE FILE OF ASSESSING OFFICER TO MAKE NECESSARY ENQUIRY AND MAK E FRESH ASSESSMENT AFTER GIVING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSES SEE. 5. THE ASSESSEE IS IN APPEAL AGAINST THE SAID EXERC ISE OF JURISDICTION BY THE COMMISSIONER UNDER SECTION 263 OF THE ACT. 6. SHRI PRAMOD S. SHINGTE APPEARED FOR THE ASSESSEE AND SHRI A.K. MODI APPEARED FOR THE REVENUE AND PUT FORWARD THEIR CONT ENTIONS. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE FIRST ASPECT TO BE CONSIDERED IN THE CASE IS WHETHER THE EXERCISE OF REVISIONARY ITA NO.983/PN/2014 SATYASHODHAK SAH. BANK LTD. 3 JURISDICTION BY THE COMMISSIONER UNDER SECTION 263 OF THE ACT WAS WARRANTED IN THE FACTS OF THE CASE, WHERE THE INTEREST DUE ON TH E NPA ACCOUNT WAS NOT ACCOUNTED FOR AS REVENUE BY THE ASSESSEE BANK IN HI S PROFIT & LOSS ACCOUNT, THOUGH IT WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUN TING. THE PLEA OF THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THAT THE ISSUE WAS SQUARELY DECIDED BY THE PUNE BENCH OF THE TRIBUNAL IN FAVOUR OF THE ASSESSEE IN ACIT VS. OSMANABAD JANATA SAHAKARI BANK LTD. IN ITA NO.795/P N/2011, RELATING TO ASSESSMENT YEAR 2007-08, DATED 31.08.2012, WHEREIN, IT WAS HELD THAT EVEN WHERE BANKS WERE FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING, THE INTEREST ACCRUING ON THE NPAS IS NOT TO BE ACCOUNTED FOR AS INCOME FOR THE RESPECTIVE YEARS BECAUSE OF THE GUIDELINES ISSUED BY THE RBI, IN THIS REGARD. THE SAID DECISION OF PUNE BENCH OF THE TRIBUNAL IS DATED 31. 08.2012. HOWEVER, THE COMMISSIONER VIDE ORDER DATED 25.03.2014 HAS OVERLO OKED THE SAID DECISION AND HELD THE ASSESSMENT ORDER PASSED BY THE ASSESSING O FFICER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. ONCE AN AS SESSMENT ORDER HAS BEEN PASSED IN LINE WITH THE SETTLED PRINCIPLES, THEN SU CH ORDER CANNOT BE SAID TO BE PREJUDICIAL TO THE INTEREST OF REVENUE. WHERE THE ISSUE HAS ALREADY BEEN DECIDED BY THE TRIBUNAL AND SIMILAR DECISION HAS BE EN TAKEN BY THE ASSESSING OFFICER IN NOT TAXING THE SAID INCOME, THEN SUCH OR DER PASSED BY THE ASSESSING OFFICER CANNOT BE HELD TO BE PREJUDICIAL TO THE INT EREST OF REVENUE. FOR EXERCISING THE POWER UNDER SECTION 263 OF THE ACT, IT IS MANDA TORY THAT THE ORDER PASSED BY THE ASSESSING OFFICER SHOULD BOTH BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. IN CASE, ANY ONE LIMB IS MISSING, THE COM MISSIONER IS NOT EMPOWERED TO EXERCISE THE REVISIONARY JURISDICTION UNDER SECT ION 263 OF THE ACT. 8. WE FIND THAT SIMILAR ISSUE WITH REGARD TO EXERCI SE OF POWER UNDER SECTION 263 OF THE ACT, AROSE BEFORE THE TRIBUNAL IN THE CA SE OF M/S. SAB MILLER BREWERIES PVT. LTD. VS. ACIT, IN ITA NO.1176/PN/2013, RELATIN G TO ASSESSMENT YEAR 2008- 09, ORDER DATED 27.02.2015, WHEREIN IT WAS HELD AS UNDER:- 21. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORD. UNDER THE PROVISIONS OF SECTION 263 OF THE ACT, THE COMMI SSIONER IS EMPOWERED TO EXERCISE HIS JURISDICTION WHERE THE ASSESSMENT O RDER PASSED BY THE ITA NO.983/PN/2014 SATYASHODHAK SAH. BANK LTD. 4 ASSESSING OFFICER IS ERRONEOUS AND IS ALSO PREJUDIC IAL TO THE INTEREST OF REVENUE. BEFORE EXERCISING THE REVISIONARY POWER U NDER SECTION 263 OF THE ACT, THE COMMISSIONER HAS TO COME TO A FINDING THAT THE ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER IS ALSO PREJU DICIAL TO THE INTEREST OF REVENUE. IN OTHER WORDS, BOTH THE CONDITIONS OF TH E ORDER BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E ARE TO BE FULFILLED IN CASE THE COMMISSIONER WISHES TO EXERCISE THE JURISD ICTION UNDER SECTION 263 OF THE ACT. THE COURTS HAVE TIME AND AGAIN DEL IBERATED UPON THE ISSUE OF WHEN AND WHERE THE ASSESSMENT ORDER CAN SA ID TO BE ERRONEOUS AND SUCH ERRONEOUS ORDER IF IT HAS RESULTED IN ESCA PEMENT OF INCOME FROM BEING BROUGHT TO TAX, THEN SUCH ORDER IS PREJUDICIA L TO THE INTEREST OF REVENUE. THE HONBLE SUPREME COURT IN MALABAR INDU STRIES COMPANY LTD V CIT 243 ITR 83 (SC) HAS HELD AS UNDER:- 'THERE CAN BE NO DOUBT THAT THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COM MITTED BY THE ASSESSING OFFICER, IT IS ONLY WHEN AN ORDER IS ERRO NEOUS THAT THE SECTION WILL BE ATTRACTED. AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUI REMENT OF THE ORDER BEING ERRONEOUS. IN THE SAME CATEGORY FALL ORDERS P ASSED WITHOUT APPLYING THE PRINCIPLES OF NATURAL JUSTICE OR WITHO UT APPLICATION OF MIND. THE PHRASE 'PREJUDICIAL TO THE INTERESTS OF THE, RE VENUE' IS NOT AN EXPRESSION OF ART AND IS NOT DEFINED IN THE ACT. UN DERSTOOD IN ITS ORDINARY MEANING IT IS OF WIDE IMPORT AND IS NOT CO NFINED TO LOSS OF TAX. THE HIGH COURT OF CALCUTTA IN DAWJEE DADABHOY AND CO. V. S. P. JAIN [1957] 31 ITR 872. THE HIGH COURT OF KARNATAKA IN CIT V. T. NARAYANA PAI [1975] 98 ITR 422, THE HIGH COURT OF BOMBAY IN CIT V. GABRIEL INDIA LTD. [1993] 203 ITR 108 AND THE HIGH COURT OF GUJARAT IN CIT V. SMT. MINALBEN S. PARIKH [1995] 21 5 ITR 81 TREATED LOSS OF TAX AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. MR. ABRAHAM RELIED ON THE JUDGMENT OF THE DIVISION BENCH OF THE HIGH COURT OF MADRAS IN VENKATAKRISHNA RICE COMPANY V. CIT [1987] 163 ITR 129 INTERPRETING 'PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 'THE HIGH COURT HELD (PAGE 138) : 'IN THIS CONTEXT, IT MUST BE REGARDED AS INVOLVING A CONCEPTION OF ACTS OR OR DERS WHICH ARE SUBVERSIVE OF THE ADMINISTRATION OF REVENUE. THERE MUST BE SOME GRIEVOUS ERROR IN THE ORDER PASSED BY THE INCOME-TA X OFFICER, WHICH MIGHT SET A BAD TREND OR PATTERN FOR SIMILAR ASSESS MENTS, WHICH ON A BROAD RECKONING, THE COMMISSIONER MIGHT THINK TO BE PREJUDICIAL TO THE INTERESTS OF REVENUE ADMINISTRATION.' IN OUR VIEW, THIS INTERPRETATION IS TOO NARROW TO MERIT ACCEPTANCE. T HE SCHEME OF THE ACT IS TO LEVY AND COLLECT TAX IN ACCORDANCE WITH T HE PROVISIONS OF THE ACT AND THIS TASK IS ENTRUSTED TO THE REVENUE. IF DUE TO AN ERRONEOUS ORDER OF THE INCOME-TAX OFFICER, THE REVE NUE IS LOSING TAX LAWFULLY PAYABLE BY A PERSON, IT WILL CERTAINLY BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE'. THE PHRASE 'PREJUDICIAL TO THE INTERESTS OF THE REV ENUE' HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSE QUENCE OF AN ORDER OF THE ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. FOR EXAMPLE, WHEN AN INCOME-TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN L AW AND IT HAS RESULTED IN LOSS OF REVENUE ; OR WHERE TWO VIEWS AR E POSSIBLE AND THE INCOME-TAX OFFICER HAS TAKEN ONE VIEW WITH WHIC H THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED A S AN ERRONEOUS ITA NO.983/PN/2014 SATYASHODHAK SAH. BANK LTD. 5 ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE, UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUSTAINABLE IN LAW.' 22. IN THE FACTS OF THE PRESENT CASE, THE COMMISSIO NER WAS OF THE VIEW THAT THE CONCLUSION DRAWN BY THE ASSESSING OFFICER ON THE BASIS OF WRITTEN SUBMISSIONS FILED BY THE ASSESSEE WAS WITHOUT APPLI CATION OF MIND. IN VIEW THEREOF, THE ORDER WAS HELD TO BE BOTH ERRONEO US AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE COMMISSIONER THEREAFT ER, REFERRED TO THE RATIO LAID DOWN BY THE SPECIAL BENCH OF MUMBAI TRIB UNAL IN DCIT VS. TIMES GUARANTEE LTD. (SUPRA) ON THE INTERPRETATION OF PROVISIONS OF SECTION 32(2) OF THE ACT AND OBSERVED THAT UN-ABSORBED DEPR ECIATION RELATING TO ASSESSMENT YEAR 1999-2000 CANNOT BE SET OFF AGAINST THE BUSINESS INCOME OF ASSESSMENT YEAR 2008-09. THE COMMISSIONE R HELD THAT IN VIEW OF THE PROVISIONS OF SECTION 32(2) OF THE ACT APPLI CABLE FOR ASSESSMENT YEAR 1999-2000, THE UNABSORBED DEPRECIATION FOR ASS ESSMENT YEAR 1999- 2000 AMOUNTING TO RS.5,41,84,430/- NEEDS TO BE DISA LLOWED. THE ASSESSING OFFICER WAS THUS, DIRECTED TO DISALLOW TH E CLAIM OF UNABSORBED DEPRECIATION TO THE EXTENT OF RS.5.41 CRORES WHILE GIVING EFFECT TO THE ORDER OF COMMISSIONER. 23. IN RESPECT OF THE SECOND ISSUE RAISED VIS--VIS THE MANAGEMENT / LICENSE FEES PAID TO SAB MILLER MANAGEMENT (IN) BV NETHERLANDS, THE ISSUE WAS SET-ASIDE TO THE FILE OF ASSESSING OFFICE R TO VERIFY THE ISSUE AND DECIDE THE SAME. 24. IN THE APPEAL FILED BY THE ASSESSEE, THE OBJECT ION HAS BEEN RAISED AGAINST SUCH INVOKING OF JURISDICTION BY THE COMMIS SIONER IN HOLDING THAT THE ORDER PASSED BY THE ASSESSING OFFICER WAS ERRON EOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON BOTH THE ACCOUNTS. A S THE VARIOUS COURTS HAVE HELD THE TWIN CONDITIONS OF THE ORDER BEING ER RONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ARE TO BE FULFILLED AND IN CASE ANY ONE OF THE CONDITIONS ARE NOT SO FULFILLED, THEN EVEN IF THE O THER CONDITION IS FULFILLED, THE REVISIONARY POWERS CANNOT BE EXERCISED BY THE C OMMISSIONER. 25. WE SHALL FIRST TAKE UP THE FIRST ISSUE OF SETTI NG OFF OF BROUGHT FORWARD UNABSORBED DEPRECIATION RELATING TO A.Y. 1999-2000 AGAINST THE BUSINESS INCOME FOR ASSESSMENT YEAR 2008-09. 26. THE CASE OF THE ASSESSEE BEFORE COMMISSIONER WA S THAT THE SAID SET OFF OF UNABSORBED DEPRECIATION CARRIED FORWARD FROM ASSESSMENT YEAR 1999-2000 COULD BE SET OFF AGAINST THE BUSINESS INC OME FOR ASSESSMENT YEAR 2008-09. RELIANCE IN THIS REGARD WAS PLACED O N THE RATIO LAID DOWN BY THE DELHI BENCH OF TRIBUNAL IN JAI USHIN LTD. VS DCIT (2008) 117 TTJ (DEL) 330, WHEREIN IT WAS HELD THAT THE ISSUE RELAT ING TO SETTING OFF THE UNABSORBED DEPRECIATION OF ASSESSMENT YEAR 1999-200 0 AGAINST THE INCOME FOR ASSESSMENT YEAR 2003-04 IS REQUIRED TO B E CONSIDERED AND DECIDED IN ACCORDANCE WITH THE PROVISIONS OF SE.32( 2) AS AMENDED W.E.F. 32(2) BY THE FINANCE ACT 2001 WHICH ARE APPLICABLE TO THAT YEAR. ANOTHER ASPECT RAISED BY THE ASSESSEE BEFORE THE COMMISSION ER WAS THAT THE DECISION IN DCIT VS. TIMES GUARANTY LIMITED (SUPRA) WAS HEARD BEFORE THE HONBLE BOMBAY HIGH COURT AND A QUESTION OF LAW HAD BEEN ADMITTED BY THE HONBLE HIGH COURT AND WHERE THE MATTER WAS DEBATABLE, IT WAS NOT SUBJECT TO RECTIFICATION. THE COMMISSIONER ON THE OTHER HAND, WAS OF THE VIEW THAT THE DECISION RELIED UPON BY THE ASSESSEE IN JAI USHIN LTD. VS DCIT (SUPRA) HAD BEEN CONSIDERED BY THE SPECIAL BEN CH OF MUMBAI TRIBUNAL IN DCIT VS. TIMES GUARANTY LIMITED (SUPRA) , VIDE ORDER DATED 30.06.2010, WHEREIN IT WAS HELD THAT THE UNABSORBED DEPRECIATION RELATING TO ASSESSMENT YEAR 1997-98 TO 1999-00 IS TO BE DEAL T WITH THE PROVISIONS OF SEC.32(2) AS APPLICABLE FOR A.Y. 1997-98 TO 1999 -00. IN VIEW THEREOF, ITA NO.983/PN/2014 SATYASHODHAK SAH. BANK LTD. 6 THE COMMISSIONER HELD THAT THE CASE LAW RELIED UPON BY THE ASSESSEE WAS NOT RELEVANT AND THE DECISION OF THE SPECIAL BENCH OF MUMBAI TRIBUNAL IN DCIT VS. TIMES GUARANTY LIMITED (SUPRA) HAD TO BE A PPLIED. 27. THE HONBLE GUJARAT HIGH COURT IN GENERAL MOTOR S INDIA PVT. LTD. VS. DCIT (2013) 354 ITR 244 (GUJ) VIDE JUDGMENT DAT ED 23.08.2012 HAD ELABORATED UPON THE ISSUE OF CLAIM OF UNABSORBED DE PRECIATION AND THE LAW APPLICABLE AND ALSO THE EFFECT OF AMENDMENT TO SECTION 32(2) OF THE ACT BY THE FINANCE ACT, 2001 AND IT WAS HELD THAT T HE AMENDMENT MADE TO SECTION 32(2) OF THE ACT BY THE FINANCE ACT, 2001 W AS APPLICABLE FROM ASSESSMENT YEAR 2002-03 AND SUBSEQUENT YEARS. IT W AS FURTHER HELD THAT ANY UNABSORBED DEPRECIATION AVAILABLE TO THE ASSESS EE ON THE FIRST DAY OF APRIL, 2002 WOULD BE DEALT IN ACCORDANCE WITH THE P ROVISIONS OF SECTION 32(2) OF THE ACT AS AMENDED BY THE FINANCE ACT, 200 1 AND NOT BY THE PROVISIONS OF SECTION 32(2) OF THE ACT AS IT STOOD BEFORE THE SAID AMENDMENT. IT WAS FURTHER HELD BY THE HONBLE GUJA RAT HIGH COURT THAT HAD THE INTENTION OF THE LEGISLATURE BEEN TO ALLOW THE UNABSORBED DEPREDATION ALLOWANCE WORKED OUT IN THE ASSESSMENT YEAR 1997-98 ONLY FOR EIGHT SUBSEQUENT ASSESSMENT YEARS EVEN AFTER TH E AMENDMENT OF SECTION 32(2) BY THE FINANCE ACT, 2001, IT WOULD HA VE INCORPORATED A PROVISION TO THAT EFFECT. 28. THE HONBLE GUJARAT HIGH COURT HAD CONSIDERED T HE ISSUE AT LENGTH AND HAD OBSERVED AS UNDER:- 30. THE LAST QUESTION WHICH ARISES FOR CONSIDERATI ON IS THAT WHETHER THE UNABSORBED DEPRECIATION PERTAINING TO THE ASSES SMENT YEAR 1997-98 COULD BE ALLOWED TO BE CARRIED FORWARD AND SET OFF AFTER A PERIOD OF EIGHT YEARS OR IT WOULD BE GOVERNED BY SE CTION 32 AS AMENDED BY THE FINANCE ACT, 2001 ? THE REASON GIVEN BY THE ASSESSING OFFICER UNDER SECTION 147 IS THAT SECTION 32(2) OF THE ACT WAS AMENDED BY THE FINANCE (NO. 2) ACT OF 1996, WIT H EFFECT FROM THE ASSESSMENT YEAR 1997-98 AND THE UNABSORBED DEPR ECIATION FOR THE ASSESSMENT YEAR 1997-98 COULD BE CARRIED FORWAR D UP TO THE MAXIMUM PERIOD OF EIGHT YEARS FROM THE YEAR IN WHIC H IT WAS FIRST COMPUTED. ACCORDING TO THE ASSESSING OFFICER, EIGHT YEARS EXPIRED IN THE ASSESSMENT YEAR 2005-06 AND ONLY TILL THEN, THE ASSESSEE WAS ELIGIBLE TO CLAIM UNABSORBED DEPRECIATION OF TH E ASSESSMENT YEAR 1997-98 FOR BEING CARRIED FORWARD AND SET OFF AGAINST THE INCOME FOR THE ASSESSMENT YEAR 2005-06. BUT THE ASS ESSEE WAS NOT ENTITLED FOR UNABSORBED DEPRECIATION OF RS.43,6 0,22,158 FOR THE ASSESSMENT YEAR 1997-98, WHICH WAS NOT ELIGIBLE FOR BEING CARRIED FORWARD AND SET OFF AGAINST THE INCOME FOR THE ASSE SSMENT YEAR 2006-07. 31. PRIOR TO THE FINANCE (NO. 2) ACT OF 1996 THE UN ABSORBED DEPRECIATION FOR ANY YEAR WAS ALLOWED TO BE CARRY F ORWARD INDEFINITELY AND BY A DEEMING FICTION BECAME ALLOWA NCE OF THE IMMEDIATELY SUCCEEDING YEAR. THE FINANCE (NO. 2) AC T OF 1996 RESTRICTED THE CARRY FORWARD OF UNABSORBED DEPRECIA TION AND SET-OFF TO A LIMIT OF EIGHT YEARS, FROM THE ASSESSMENT YEAR 1997-98. CIRCULAR NO. 762, DATED FEBRUARY 18, 1998 (SEE [199 8] 230 ITR (ST.) 12), ISSUED BY THE CENTRAL BOARD OF DIRECT TA XES (CBDT) IN THE FORM OF EXPLANATORY NOTES CATEGORICALLY PROVIDED, T HAT THE UNABSORBED DEPRECIATION ALLOWANCE FOR ANY PREVIOUS YEAR TO WHICH FULL EFFECT CANNOT BE GIVEN IN THAT PREVIOUS YEAR S HALL BE CARRIED FORWARD AND ADDED TO THE DEPRECIATION ALLOWANCE OF THE NEXT YEAR AND BE DEEMED TO BE PART THEREOF. ITA NO.983/PN/2014 SATYASHODHAK SAH. BANK LTD. 7 32. SO, THE UNABSORBED DEPRECIATION ALLOWANCE OF TH E ASSESSMENT YEAR 1996-97 WOULD BE ADDED TO THE ALLO WANCE OF THE ASSESSMENT YEAR 1997-98 AND THE LIMITATION OF EIGHT YEARS FOR THE CARRY FORWARD AND SET OFF OF SUCH UNABSORBED DEPREC IATION WOULD START FROM THE ASSESSMENT YEAR 1997-98. 33. WE MAY NOW EXAMINE THE PROVISIONS OF SECTION 32 (2) OF THE ACT BEFORE ITS AMENDMENT BY THE FINANCE ACT, 2001. THE SECTION, PRIOR TO ITS AMENDMENT BY THE FINANCE ACT, 2001, RE AD AS UNDER : 'WHERE IN THE ASSESSMENT OF THE ASSESSEE FULL EFFEC T CANNOT BE GIVEN TO ANY ALLOWANCE UNDER CLAUSE (II) OF SUB- SECTION (1) IN ANY PREVIOUS YEAR OWNING TO THERE BEING NO PROFI TS OR GAINS CHARGEABLE FOR THAT PREVIOUS YEAR OR OWING TO THE PROFITS OR GAINS BEING LESS THAN THE ALLOWANCE, THE N, THE ALLOWANCE OR THE PART OF ALLOWANCE TO WHICH EFFECT HAS NOT BEEN GIVEN (HEREINAFTER REFERRED TO AS UNABSORBED DEPRECIATION ALLOWANCE), AS THE CASE MAY BE, (I) SHALL BE SET OFF AGAINST THE PROFITS AND GAINS, IF ANY, OF ANY BUSINESS OR PROFESSION CARRIED ON BY HIM AND ASSESSABLE FOR THAT ASSESSMENT YEAR ; (II) IF THE UNABSORBED DEPRECIATION ALLOWANCE CANNO T BE WHOLLY SET OFF UNDER CLAUSE (I), THE AMOUNT NOT SO SET OFF SHALL BE SET OFF FROM THE INCOME UNDER ANY OTHER HE AD, IF ANY, ASSESSABLE FOR THAT ASSESSMENT YEAR; (III) IF THE UNABSORBED DEPRECIATION ALLOWANCE CANN OT BE WHOLLY SET OFF UNDER CLAUSE (I) AND CLAUSE (II), THE AMOUNT OF ALLOWANCE NOT SO SET OFF SHALL BE CARRIED FORWAR D TO THE FOLLOWING ASSESSMENT YEAR, AND (A) IT SHALL BE SET OFF AGAINST THE PROFITS AND GAI NS, IF ANY, OF ANY BUSINESS OR PROFESSION CARRIED ON BY HI M AND ASSESSABLE FOR THAT ASSESSMENT YEAR ; (B) IF THE UNABSORBED DEPRECIATION ALLOWANCE CANNOT BE WHOLLY SO SETOFF, THE AMOUNT OF UNABSORBED DEPRE CIATION ALLOWANCE NOT SO SET OFF SHALL BE CARRIED FORWARD T O THE FOLLOWING ASSESSMENT YEAR NOT BEING MORE THAN EIGHT ASSESSMENT YEARS IMMEDIATELY SUCCEEDING THE ASSESSM ENT YEAR FOR WHICH THE AFORESAID ALLOWANCE WAS FIRST CO MPUTED: PROVIDED THAT THE TIME LIMIT OF EIGHT ASSESSMENT YE ARS SPECIFIED IN SUB-CLAUSE (B) SHALL NOT APPLY IN CASE OF A COMPANY FOR THE ASSESSMENT YEAR BEGINNING WITH THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE SAID COMPANY HAS BECOME A SICK INDUSTRIAL COMPANY U NDER SUB-SECTION (1) OF SECTION 17 OF THE SICK INDUSTRIA L COMPANY (SPECIAL PROVISIONS) ACT, 1985 (1 OF 1986), AND END ING WITH THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR I N WHICH THE ENTIRE NET WORTH OF SUCH COMPANY BECOMES EQUAL TO OR EXCEEDS THE ACCUMULATED LOSSES. EXPLANATION.FOR THE PURPOSES OF THIS CLAUSE, 'NET WORTH' SHALL HAVE THE MEANING ASSIGNED TO IT IN CLA USE (GA) OF SUB-SECTION (1) OF SECTION 3 OF THE SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985.' ITA NO.983/PN/2014 SATYASHODHAK SAH. BANK LTD. 8 34. THE AFORESAID PROVISION WAS INTRODUCED BY THE F INANCE (NO.2) ACT, 1996, AND FURTHER AMENDED BY THE FINANC E ACT, 2000. THE PROVISION INTRODUCED BY THE FINANCE (NO. 2) ACT WAS CLARIFIED BY THE FINANCE MINISTER TO BE APPLICABLE WITH PROSPECT IVE EFFECT. 35. SECTION 32(2) OF THE ACT WAS AMENDED BY THE FIN ANCE ACT, 2001, AND THE PROVISION SO AMENDED READS AS UNDER : 'WHERE, IN THE ASSESSMENT OF THE ASSESSEE, FULL EFF ECT CANNOT BE GIVEN TO ANY ALLOWANCE UNDER SUB-SECTION (1) IN ANY PREVIOUS YEAR, OWING TO THERE BEING NO PROFITS OR GAINS CHARGEABLE FOR THAT PREVIOUS YEAR, OR OWING TO THE PROFITS OR GAINS CHARGEABLE BEING LESS THAN THE ALLOWANCE, THE N, SUBJECT TO THE PROVISIONS OF SUB-SECTION (2) OF SEC TION 72 AND SUB-SECTION (3) OF SECTION 73, THE ALLOWANCE OR THE PART OF THE ALLOWANCE TO WHICH EFFECT HAS NOT BEEN GIVEN, AS TH E CASE MAY BE, SHALL BE ADDED TO THE AMOUNT OF THE ALLOWAN CE FOR DEPRECIATION FOR THE FOLLOWING PREVIOUS YEAR AND DE EMED TO BE PART OF THAT ALLOWANCE, OR IF THERE IS NO SUCH A LLOWANCE FOR THAT PREVIOUS YEAR, BE DEEMED TO BE THE ALLOWANCE O F THAT PREVIOUS YEAR, AND SO ON FOR THE SUCCEEDING PREVIOU S YEARS.' 36. THE PURPOSE OF THIS AMENDMENT HAS BEEN CLARIFIE D BY THE CENTRAL BOARD OF DIRECT TAXES IN CIRCULAR NO. 14 OF 2001 (SEE [2001] 252 ITR (ST.) 65, 90). THE RELEVANT PORTION OF THE SAID CIRCULAR READS AS UNDER : 'MODIFICATION OF PROVISIONS RELATING TO DEPRECIATIO N 30.1 CINDER THE EXISTING PROVISIONS OF SECTION 32 OF THE INCOME-TAX ACT, CARRY FORWARD AND SET OFF OF UNABSO RBED DEPRECIATION IS ALLOWED FOR EIGHT ASSESSMENT YEARS. 30.2 WITH A VIEW TO ENABLE THE INDUSTRY TO CONSERVE SUFF ICIENT FUNDS TO REPLACE PLANT AND MACHINERY, SPECIALLY IN AN ERA WHERE OBSOLESCENCE TAKES PLACE SO OFTEN, THE ACT HA S DISPENSED WITH THE RESTRICTION OF EIGHT YEARS FOR C ARRY FORWARD AND SET OFF OF UNABSORBED DEPRECIATION. THE ACT HAS ALSO CLARIFIED THAT IN COMPUTING THE PROFITS AND GAINS O F BUSINESS OR PROFESSION FOR ANY PREVIOUS YEAR, DEDUCTION OF D EPREDATION UNDER SECTION 32 SHALL BE MANDATORY. 30.3 UNDER THE EXISTING PROVISIONS, NO DEDUCTION FOR DEPRECIATION IS ALLOWED ON ANY MOTOR CAR MANUFACTUR ED OUTSIDE INDIA UNLESS IT IS USED (I) IN THE BUSINESS OF RUNNING IT ON HIRE FOR TOURISTS, OR (II) OUTSIDE IN THE ASSESS EE'S BUSINESS OR PROFESSION IN ANOTHER COUNTRY. 30.4 THE ACT HAS ALLOWED DEPRECIATION ALLOWANCE ON ALL IMPORTED MOTOR CARS ACQUIRED ON OR AFTER 1ST APRIL, 2001. 30.5 THESE AMENDMENTS WILL TAKE EFFECT FROM THE 1ST APRI L, 2002, AND WILL, ACCORDINGLY, APPLY IN RELATION TO T HE ASSESSMENT YEAR 2002-03 AND SUBSEQUENT YEARS.' 37. THE CENTRAL BOARD OF DIRECT TAXES CIRCULAR CLAR IFIES THE INTENT OF THE AMENDMENT THAT IT IS FOR ENABLING THE INDUST RY TO CONSERVE SUFFICIENT FUNDS TO REPLACE PLANT AND MACHINERY AND ACCORDINGLY THE ITA NO.983/PN/2014 SATYASHODHAK SAH. BANK LTD. 9 AMENDMENT DISPENSES WITH THE RESTRICTION OF EIGHT Y EARS FOR CARRY FORWARD AND SET OFF OF UNABSORBED DEPRECIATION. THE AMENDMENT IS APPLICABLE FROM THE ASSESSMENT YEAR 2002-03 AND SUB SEQUENT YEARS. THIS MEANS THAT ANY UNABSORBED DEPRECIATION AVAILABLE TO AN ASSESSEE ON THE 1ST DAY OF APRIL, 2002 (THE ASSE SSMENT YEAR 2002-03), WILL BE DEALT WITH IN ACCORDANCE WITH THE PROVISIONS OF SECTION 32(2) AS AMENDED BY THE FINANCE ACT, 2001, AND NOT BY THE PROVISIONS OF SECTION 32(2) AS IT STOOD BEFORE THE SAID AMENDMENT. HAD THE INTENTION OF THE LEGISLATURE BEEN TO ALLOW THE UNABSORBED DEPREDATION; ALLOWANCE WORKED OUT IN THE ASSESSMENT YEAR 1997-98 ONLY FOR EIGHT SUBSEQUENT ASSESSMENT YEARS EVEN AFT ER THE AMENDMENT OF SECTION 32(2) BY THE FINANCE ACT, 2001 , IT WOULD HAVE INCORPORATED A PROVISION TO THAT EFFECT. HOWEV ER, IT DOES NOT CONTAIN ANY SUCH PROVISION. HENCE, KEEPING IN VIEW THE PURPOSE OF THE AMENDMENT OF SECTION 32(2) OF THE ACT, A PURPOS IVE AND HARMONIOUS INTERPRETATION HAS TO BE TAKEN. WHILE CO NSTRUING THE TAXING STATUTES, RULE OF STRICT INTERPRETATION HAS TO BE APPLIED, GIVING FAIR AND REASONABLE CONSTRUCTION TO THE LANGUAGE OF THE SECTION WITHOUT LEANING TO THE SIDE OF THE ASSESSEE OR THE REVENUE. BUT IF THE LEGISLATURE FAILS TO EXPRESS CLEARLY AND THE AS SESSEE BECOMES ENTITLED FOR A BENEFIT WITHIN THE AMBIT OF THE SECT ION BY THE CLEAR WORDS USED IN THE SECTION, THE BENEFIT ACCRUING TO THE ASSESSEE CANNOT BE DENIED. HOWEVER, CIRCULAR NO. 14 OF 2001 HAD CLARIFIED THAT UNDER SECTION 32(2), IN COMPUTING THE PROFITS AND GAINS OF BUSI- NESS OR PROFESSION FOR ANY PREVIOUS YEAR, DEDUCTION OF DEPRECIATION UNDER SECTION 32 SHALL BE MANDATORY. THEREFORE, THE PROVISIONS OF SECTION 32(2) AS AMENDED BY THE FINANCE ACT, 2001, WOULD ALLOW THE UNABSORBED DEPRECIATION ALLOWANCE AVAILABLE IN THE ASSESSMENT YEARS 1997-98, 1999-2000, 2000-01 AND 2001-02 TO BE CARRIED FORWARD TO THE SUCCEEDING YEARS, AND IF ANY UNABSOR BED DEPRECIATION OR PART THEREOF COULD NOT BE SET OFF T ILL THE ASSESSMENT YEAR 2002-03 THEN IT WOULD BE CARRIED FORWARD TILL THE TIME IT IS SET OFF AGAINST THE PROFITS AND GAINS OF SUBSEQUENT YEARS. 38. THEREFORE, IT CAN BE SAID THAT, CURRENT DEPRECI ATION IS DEDUCTIBLE IN THE 40 FIRST PLACE FROM THE INCOME OF THE BUSINESS TO WHICH IT RELATES. IF SUCH DEPRECIATION AMOUNT IS LA RGER THAN THE AMOUNT OF THE PROFITS OF THAT BUSINESS, THEN SUCH E XCESS COMES FOR ABSORPTION FROM THE PROFITS AND GAINS FROM ANY OTHE R BUSINESS OR BUSINESS, IF ANY, CARRIED ON BY THE ASSESSEE. IF A BALANCE IS LEFT EVEN THEREAFTER, THAT BECOMES DEDUCTIBLE FROM OUT O F INCOME FROM ANY SOURCE UNDER ANY OF THE OTHER HEADS OF INCOME D URING THAT YEAR. IN CASE THERE IS A STILL BALANCE LEFT OVER, I T IS TO BE TREATED AS UNABSORBED DEPRECIATION AND IT IS TAKEN TO THE NEXT SUCCEEDING YEAR. WHERE THERE IS CURRENT DEPRECIATION FOR SUCH SUCCEEDING YEAR THE UNABSORBED DEPRECIATION IS ADDED TO THE CURRENT DEPRECIATION FOR SUCH SUCCEEDING YEAR AND IS DEEMED AS PART THER EOF. IF, HOWEVER, THERE IS NO CURRENT DEPRECIATION FOR SUCH SUCCEEDING YEAR, THE UNABSORBED DEPRECIATION BECOMES THE DEPRECIATIO N ALLOWANCE FOR SUCH SUCCEEDING YEAR. WE ARE OF THE CONSIDERED OPINION THAT ANY UNABSORBED DEPRECIATION AVAILABLE TO AN ASSESSE E ON THE 1ST DAY OF APRIL, 2002 (THE ASSESSMENT YEAR 2002-03), W ILL BE DEALT WITH IN ACCORDANCE WITH THE PROVISIONS OF SECTION 32(2) AS AMENDED BY THE FINANCE ACT, 2001. AND ONCE CIRCULAR NO. 14 OF 2001 CLARIFIED THAT THE RESTRICTION OF EIGHT YEARS FOR CARRY FORWA RD AND SET OFF OF UNABSORBED DEPRECIATION HAD BEEN DISPENSED WITH, TH E UNABSORBED DEPRECIATION FROM THE ASSESSMENT YEAR 1997-98 UP TO THE ASSESSMENT YEAR 2001-02 GOT CARRIED FORWARD TO THE ASSESSMENT YEAR 2002-03 AND BECAME PART THEREOF, IT CAME TO BE GOVERNED BY ITA NO.983/PN/2014 SATYASHODHAK SAH. BANK LTD. 10 THE PROVISIONS OF SECTION 32(2) AS AMENDED BY THE F INANCE ACT, 2001, AND WERE AVAILABLE FOR CARRY FORWARD AND SET OFF AGAINST THE PROFITS AND GAINS OF SUBSEQUENT YEARS, WITHOUT ANY LIMIT WHATSOEVER. FOR THE AFORESAID REASONS, THIS WRIT PETITION SUCCE EDS AND IS ALLOWED. THE 41 NOTICE ISSUED UNDER SECTION 148 O F THE INCOME-TAX ACT, 1961, DATED MARCH 29, 2011, ANNEXURE A AND THE ASSESSMENT ORDER DATED DECEMBER 27, 2011, PASSED BY THE ASSESS ING OFFICER ANNEXURE F RESPECTIVELY TO THE WRIT PETITION ARE QU ASHED. RULE IS MADE ABSOLUTE. THE PARTIES SHALL BEAR THEIR OWN COS TS. 29. SIMILAR PROPOSITION HAS BEEN LAID DOWN BY THE H ONBLE GUJARAT HIGH COURT IN CIT VS. GUJARAT THEMIS BIOSYN LTD. (2014) 44 TAXMANN.COM 204 (GUJ) VIDE JUDGMENT DATED 24.02.2014. THE VISAKHAP ATNAM BENCH OF THE TRIBUNAL IN JCIT VS. M/S. ALUFLUORIDE LTD IN ITA NO .134/VIZAG/2013 RELATING TO ASSESSMENT YEAR 2007-08, VIDE ORDER DATED 05.03. 2014 APPLYING THE RATIO LAID DOWN BY THE HONBLE GUJARAT HIGH COURT I N GENERAL MOTORS INDIA PVT. LTD. VS. DCIT (SUPRA), HELD THAT THE BENEFIT O F SET OFF OF UNABSORBED DEPRECIATION OF ASSESSMENT YEARS 1997-98 AND 1998-9 9 COULD BE ALLOWED AGAINST THE INCOME RELATING TO ASSESSMENT YEAR 2007 -08. IN APPLYING THE RATIO LAID DOWN BY THE HONBLE GUJARAT HIGH COURT, THE TRIBUNAL HELD THAT THE RELIANCE PLACED BY THE LEARNED DEPARTMENTAL REP RESENTATIVE FOR THE REVENUE ON THE DECISION OF HYDERABAD BENCH OF THE T RIBUNAL IN DHARTI DREDGING & INFRASTRUCTURE LTD. VS. ADDL.CIT (SUPRA) & HONBLE MADRAS HIGH COURT IN CIT VS. PIONEER ASIA PACKING (P.) LTD ., (SUPRA) AND CIT VS. S&S POWER SWITCHGEAR LTD. (SUPRA) WAS NOT CORRECT. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE BEFORE US HAD ALSO PLACED RELIANCE ON THE DECISIONS OF DHARTI DREDGING & INFR ASTRUCTURE LTD. VS. ADDL.CIT (SUPRA) AND FURTHER IN NINESTAR ENTERPRISE S (P.) LTD. VS. ACIT (2013) 30 TAXMANN.COM 57 (HYD.) AND ALSO HONBLE MA DRAS HIGH COURT IN CIT VS. PIONEER ASIA PACKING (P.) LTD., (SUPRA) AND CIT VS. S&S POWER SWITCHGEAR LTD. (SUPRA). IN VIEW OF THE SAME BEING CONTRARY TO THE ONLY DECISION OF HONBLE GUJARAT HIGH COURT ON THE ISSUE FOR ALLOWANCE OF SET OFF OF BROUGHT FORWARD UNABSORBED DEPRECIATION RELA TING TO ASSESSMENT YEAR 1999-2000 AGAINST THE INCOME ARISING IN THE YE AR UNDER APPEAL I.E. ASSESSMENT YEAR 2008-09 IS OVER RULED BY THE ONLY D ECISION BROUGHT TO OUR NOTICE OF THE HONBLE GUJARAT HIGH COURT IN GENERAL MOTORS INDIA PVT. LTD. VS. DCIT (SUPRA). 30. ANOTHER ASPECT OF THE ISSUE IS THAT WHERE THERE IS ONLY JUDGMENT OF HIGH COURT THOUGH NOT JURISDICTIONAL HIGH COURT AND WHEN NO CONTRARY HIGH COURTS DECISION WAS AVAILABLE ON THE ISSUE, THEN T HE HIGH COURTS DECISION HAD TO BE FOLLOWED IN PREFERENCE TO THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL. THIS WAS THE DECISION OF THIRD MEMBER IN THE CASE OF KANEL OIL & EXPORTS INDUSTRIES LTD. REPORTED IN 126 TTJ 158 ( AHM) (TM). 31. APPLYING THE RATIO LAID DOWN BY THE HONBLE GUJ ARAT HIGH COURT IN GENERAL MOTORS INDIA PVT. LTD. VS. DCIT (SUPRA) TO THE FACTS OF THE PRESENT CASE, THE ISSUE OF ALLOWABILITY OF UNABSORBED DEPRE CIATION RELATING ASSESSMENT YEAR 1999-2000 AGAINST THE INCOME ARISIN G IN ASSESSMENT YEAR 2008-09 IS TO BE SET OFF AND CONSEQUENTLY, THE ORDER PASSED BY THE ASSESSING OFFICER IN THIS REGARD CANNOT BE SAID TO BE PREJUDICIAL TO THE INTEREST OF REVENUE. CONSEQUENTLY, THE REVISIONARY POWERS EXERCISED BY THE COMMISSIONER AGAINST THE ORDER OF ASSESSMENT WH ICH IS NOT PREJUDICIAL TO THE INTEREST OF REVENUE, EVEN WHERE THE ORDER PA SSED BY THE ASSESSING OFFICER WAS ERRONEOUS, CANNOT BE EXERCISED, SINCE T HE TWIN CONDITIONS HAVE NOT BEEN FULFILLED IN THE CASE. IN VIEW THERE OF, WE REVERSE THE DIRECTIONS OF THE COMMISSIONER IN THIS REGARD AND U PHOLD THE ORDER OF ASSESSING OFFICER IN ALLOWING THE SET OFF OF UNABSO RBED DEPRECIATION ITA NO.983/PN/2014 SATYASHODHAK SAH. BANK LTD. 11 RELATING TO ASSESSMENT YEAR 1999-2000 AMOUNTING TO RS.5,41,84,430/- CLAIMED AGAINST THE BUSINESS INCOME FOR ASSESSMENT YEAR 2008-09 IN COMPUTATION OF INCOME. THE DIRECTIONS OF THE COMMI SSIONER IN THIS REGARD ARE THUS, REVERSED AND THE ORDER OF ASSESSING OFFIC ER IS RESTORED. 9. FOLLOWING THE SAME PARITY OF REASONING AND AS PO INTED OUT BY US IN THE PARAS HEREINABOVE THAT THE ORDER PASSED BY THE ASSE SSING OFFICER WAS NOT PREJUDICIAL TO THE INTEREST OF REVENUE, HENCE, THE REVISIONARY JURISDICTION EXERCISED BY THE COMMISSIONER WAS NOT WARRANTED AND ACCORDINGLY, WE ANNUL THE ORDER OF COMMISSIONER, IN THIS REGARD. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED ON THIS 25 TH DAY OF MARCH, 2015. SD/- SD/- (R.K. PANDA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 25 TH MARCH, 2015 GCVSR COPY OF THE ORDER IS FORWARDED TO: - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT-I, KOLHAPUR; 4) THE CIT-I, KOLHAPUR; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE