Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (1) TMI 1908 - AT - Income TaxRevision u/s 263 - adjustment of unabsorbed depreciation against short term capital gains - interpretation of a taxing statute - whether AO had rightly allowed benefit of setting off of unabsorbed depreciation pertaining to assessment year 1996-97 in the impugned assessment year i.e 2007- 08 against short term capital gains - HELD THAT:- We make it clear that we are dealing with a case of interpretation of a taxing statute. There is no quarrel between the parties about facts of the case. Rather the issue between them is about interpretation of section 32(2) as it stood before and after 1.4.1997 upto amendment introduced by the Finance Act, 2001. That being the case, the necessary interpretation of the relevant provision made by the ‘tribunal’, high court or for that matter, hon'ble apex court would govern the question raised hereinabove. Therefore, we accept the arguments of the assessee and hold that the Assessing Officer had rightly found it entitled for set off of the impugned unabsorbed depreciation. In view of contradictory views of the ‘tribunal’ and high court(supra), since we have already held that the impugned brought forward unabsorbed depreciation pertaining to assessment year 1996-97 is entitled to be set off in the impugned assessment year as well, it emerges that there is only one interpretation possible which favours the assessee. So, the case law of Malabar Industrial Co. Ltd. (supra) goes against case of the Revenue. Jurisdiction u/s 263 cannot be stretched beyond reasons in show cause notice. We reiterate that there are only two reasons in the show cause notice i.e impugned depreciation of assessment year 1996-97 could not have been set off in assessment year 2007-08 and other one is that the depreciation had been wrongly allowed to be set off by the Assessing Officer against short term capital gains - In view of the case law of General Motors India (P) Ltd. (supra) [2012 (8) TMI 714 - GUJARAT HIGH COURT], both reasons are no more sustainable. Similarly, we also see n No reason to agree with the arguments of the Revenue that since the CIT has only directed the Assessing Officer to reframe the assessment after examining the issue afresh need not be disturbed in the instant appeal as the assessee would be at liberty to cite the aforesaid decisions. In our considered opinion, once the law settled by the hon'ble high court favours the assessee, there is no justification in reviving yet another innings before the Assessing Officer in consequential proceeding - we draw support from the case law of Max India Ltd [2007 (11) TMI 12 - SUPREME COURT] wherein the hon'ble apex court observes that position of law in 263 proceedings has to be seen when the CIT passes order. - Decided in favour of assessee.
|