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2016 (6) TMI 931 - AT - Income TaxRevision u/s 263 - Determination of loss to be carried forward - loss represented unabsorbed depreciation which was to be carried forward to the subsequent assessment year along with the earlier year’s unabsorbed depreciation - CIT(A) held that unabsorbed depreciation cannot be carried forward without set off beyond a period of 8 years and AO ought to have held that unabsorbed depreciation which remained without set off ought to have been treated by the AO as not eligible for carry forward - Held that:- From the language of the sub-s. (2) of s. 32 it is manifest that it is a substantive provision and not a procedural one. It is settled legal position that the amendment to substantive provision is normally prospective unless expressly stated otherwise or it appears so by necessary implication. In the light of the judicial precedents on the issue especially that of the Hon’ble Gujarat High Court in the case of General Motors India Pvt.Ltd. (2012 (8) TMI 714 - GUJARAT HIGH COURT )wherein held that unabsorbed depreciation from AY. 1997-98 up to AY. 2001-02 got carried forward to AY. 2002-03 and became part thereof and it came to be governed by the provisions of sec. 32(2) as amended by the Finance Act, 2001 and were available for carry forward and set off against income of subsequent years without any limit and which has the effect of overruling the decision of the Special Bench in the case of Times Gurantee (2010 (6) TMI 516 - ITAT, MUMBAI ) as relied upon by CIT(A) and also on the basis of other decisions referred by the Assessee before us, the order of the CIT cannot be sustained. Section 263 requires the satisfaction of two conditions viz. (i) the order sought to be revised is erroneous; and (ii) it is prejudicial to the interests of Revenue. If one of them is absent i.e. if the order sought to be revised is erroneous but not prejudicial to the interest of Revenue or if it is not erroneous but is prejudicial to the interests of Revenue, the provisions of section 263(1) of the Act are not attracted as the phrase ‘prejudicial to the interests of Revenue’ is to be read in conjunction with an ‘erroneous’ order passed by the Assessing Officer. When an Assessing Officer adopts one of the courses permissible in law and it has resulted in loss of Revenue, or where two views are possible and the Assessing Officer has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interests of Revenue. Every loss of Revenue as a consequence of an order of the Assessing Officer, cannot be treated as prejudicial to the interests of Revenue. This was the view held by the Hon'ble Apex Court in the case of Malabar Industrial Co. Ltd. (2000 (2) TMI 10 - SUPREME Court ). - Decided in favour of assessee
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