Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (10) TMI 464 - AT - Income TaxAddition of STCG - transfer of capital assets - Whether the taking over of the possession and control over of the assets of the assessee by the secured lender(s) tantamount to transfer of assets from the borrower in default to the secured lenders - Held that:- The AO had erred in applying the provisions of s. 2 (47) of the Act in considering that the secured lender acquire title to the secured assets of the assessee company on taking over of possession of assets of the assessee by overlooking the fact that what the secured lenders acquired on taking over of possession of the secured assets were merely a special right to execute or implement the recovery of its dues from dealing with those assets of the assessee company - the ownership rights in the assets did not at any stage stand transferred to the secured lenders by taking over the possession of secured assets - Thus, the sale consideration received by the secured lender(s) actually belonged to the borrower which by operation of law remained retained by the secured lenders to recover their costs, dues etc. Further, if the consideration to the assessee is to be considered as the sale amount received by the lending banks, then, the loans waived by such banks [availed by the assessee for the purchase of capital assets such as land, building, plant and machinery etc.,] was nothing but a capital receipt not liable for tax since neither the provisions of s. 28(iv) nor s. 41(1) of the Act is attracted. Denial of benefit of set off of brought forward unabsorbed depreciation - Held that:- Following the decision in GENERAL MOTORS INDIA PVT. LTD Versus DEPUTY COMMISSIONER OF INCOME-TAX [2012 (8) TMI 714 - GUJARAT HIGH COURT] - keeping in view the purpose of amendment of section 32(2) of the Act, a purposive and harmonious interpretation has to be taken - while construing 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 assessee or the revenue - But if the legislature fails to express clearly and the assessee becomes entitled for a benefit within the ambit of the section by the clear words used in the section, the benefit accruing to the assessee cannot be denied - it can be said that current depreciation is deductible in the first place from the income of the business to which it relates. Any unabsorbed depreciation available to an assessee on 1st day of April, 2002 (A.Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001 - and once the Circular No. 14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation form A.Y. 1997-98 up to the A.Y. 2001-02 got carried forward to the AY 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act 2001 and were available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever - the assessee company is eligible for carry forward and set off of unabsorbed depreciation – Decided in favour of assessee.
|