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2015 (5) TMI 186 - ITAT DELHI

2015 (5) TMI 186 - ITAT DELHI - TMI - Claim of brought forward of unabsorbed depreciation - change in shareholding - applicability of restriction u/s 79 - Carry forward losses already exhausted - Held that:- Assessee is not carrying forward and setting off any loss but has unabsorbed depreciation, which is guided by the provisions of section 32(2) and not section 79. In view of the factual position on record of the AO, the submissions made before the undersigned and in view of the ratio laid dow .....

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peal filed by Revenue against the order of Ld. CIT(A) dated 21.12.2011. The only grievance raised by Revenue was against action by Ld. CIT(A) by which he has allowed claim of brought forward of unabsorbed depreciation. 2. At the outset, the Ld. D.R. invited our attention to assessment order and submitted that the assessee had already exhausted the carry forward losses and moreover, there was change in shareholding and therefore, the claim of brought forward loss was not allowed u/s 79 of the I. .....

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ciation and unabsorbed depreciation. Ld. A.R. submitted that various High Courts including Kerala and Madras High Courts have followed Hon'ble Supreme Court s order and in this respect our attention was invited to paper book pages 3-17. 4. We have hard rival parties and have gone through the material placed on record. We find that Ld. CIT(A) had called for report for Assessment Year 2009-10 and from the records he found that assessee had claimed set off of depreciation for the income and its .....

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depreciation or unabsorbed development rebate. We agree with the High Court. 5. Ld. CIT(A) has already looked into the case law relied by assessee and for the sake of convenience, findings of Ld. CIT(A) are reproduced below: 4. Before the undersigned the appellant has submitted: "The assessee has thus claimed set off from brought forward "unabsorbed depreciation" only as noted by the AO itself in its order. The year wise details of "unabsorbed depreciation" of ₹ 6, .....

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AD it is clear that even though the asses e - w s having brought forward balance of "business losses" also, however the assessee has claimed set off in respect of "unabsorbed depreciation" only which is abundantly clear from the Return of Income (supra) and this fact has itself been admitted by the AO in the first line of its order. The assessee has thus not claimed any set off on account of "business losses" as a matter of fact and record. In the process of disall .....

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on that even in those cases where the provisions of section 79 are held to be applicable the disallowance will be confined to "business losses" only and will not extend to "unabsorbed depreciation". The decision of Hon'ble Supreme Court in the case of CIT Vs Subhulaxmi Mills Ltd. 249 ITR 795 SC (pages 17-18 paper book): The Hon'ble Supreme Court in this case very clearly held as under: "So far as question No. 2 is concerned, the question is whether in applying se .....

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t has claimed brought forward and set off of depreciation of ₹ 62,36,736/- from the income of ₹ 93,25,494/- as shown in the P&L account. It has returned the gross total income of ₹ 30,88,758/-. The ITR 6 on the file shows in the Schedule BFLA, (giving details of income after set off of brought forward losses of earlier years) that the appellant had not claimed brought forward loss set off, in fact it had claimed brought forward depreciation set off of ₹ 62,36,736/-. I .....

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