TMI Blog2005 (1) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee. The matter came up before the learned Commissioner of Income-tax (Appeals). He allowed the relief accepting the plea of the assessee that the claim of unabsorbed depreciation is to be allowed in both the years which resulted loss in the years under consideration. 2. We have heard both the sides on this issue. It is an undisputed fact that the return filed by the assessee for both the years were late. Claim of the assessee is that for the purpose of disallowance of loss on account of late filing of return under business loss and that is not covered by the claim of unabsorbed depreciation under section 132(2) of the Act. For better appreciation of the issue let us consider the provision of section 139(3) as follows : "13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation allowance cannot be wholly set off under clause ( i ) and clause ( ii ), the amount of allowance not so set off shall be carried forward to the following assessment year and ( a )it 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; ( b )if the unabsorbed depreciation allowance cannot be wholly so set off, the amount of unabsorbed depreciation allowance not so set off shall be carried forward to the following assessment year not being more than eight assessment years immediately succeeding the assessment year for which the aforesaid allowance was first computed." 3. After hearing both sides and on careful study of the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed as in section 139(3) for allowing business loss mentioned above. Therefore, these two provisions are independent of each other. Therefore, claim of section 32(2) cannot be denied to an assessee only because it resulted loss of total income and return was filed late. In view of the circumstances above, in our opinion learned CIT(A) was justified in allowing relief to the assessee. Accordingly this ground for both the years is rejected. 4. For the assessment year 2001-02, the other ground raised by the revenue is regarding claim of expenditure on scientific research to the tune of Rs. 6,47,18,694. The assessee was carrying on the business of manufacture and sale of bulk drugs. The assessee had purchased plant and machinery for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned CIT(A) and submitted that the assessee failed to submit the details before the Assessing Officer. Therefore, the amount was rightly added as capital expenditure. It was further submitted that learned CIT(A) failed to appreciate the grounds mentioned by the Assessing Officer for which the disallowance was made. Learned CIT(A) allowed on some other ground which was not relevant. On the other hand, learned counsel for assessee on behalf of assessee has pointed out various paragraphs from the order passed by learned CIT(A) where he has considered all the evidences which were filed by the assessee before the Assessing Officer. It was submitted that the Assessing Officer was present at the time of hearing of assessee before CIT(A). The m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order at page 16, we find that on examination of the materials on record, learned CIT(A) came to the conclusion that the details of payment, cheque number, DD number and the bank on which the said cheques were drawn were duly filed by the assessee. It has been mentioned in the order that the present Assessing Officer in his remand report has accepted the fact that the details were filed by the assessee. It has been mentioned that such details were available in the record which were filed by the assessee on 12-3-2004 and 30-3-2004 in respect of date of payment, amounts thereof, cheque number and bank details, etc. Relevant portion of the order passed by the learned CIT(A) is quoted below : "On the facts of the case, one is compelle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at Rs. 6,47,18,694 as disallowance on the ground of non-genuineness of purchase of R D machinery made. Accordingly, I have to direct the Assessing Officer to delete the impugned disallowance of Rs. 6,47,18,694." From the above-cited finding, it is clear that the entire details required to be produced before the Assessing Officer were already filed by the assessee before the Assessing Officer and available in the file. However, the Assessing Officer failed to consider the materials while passing the assessment order. Learned CIT(A) not only considered those material but also considered the remand report called by him in respect of those materials from the Assessing Officer. The Assessing Officer was also present during the appellate pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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