TMI Blog2016 (2) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... g assessment proceedings although the same is not claimed by the taxpayer vide Return of income filed with the Revenue as held by Hon’ble Bombay High Court in CIT v. Pruthvi Brokers & Shareholders (P) Ltd., (2012 (7) TMI 158 - BOMBAY HIGH COURT). - Decided against revenue CIT(A) directing the A.O. to consider the revised statement of unabsorbed depreciation and book loss furnished by the assessee company for computation of book profit u/s 115JB of the Act confirmed - Decided against revenue - ITA No. 3346/Mum/2013 - - - Dated:- 9-12-2015 - Amit Shukla, JM And Ramit Kochar, AM For the Appellant : Shri Nitin Waghmode For the Respondent : Shri Jitendra Jain ORDER Per Ramit Kochar, Accountant Member This appeal, filed by the Revenue, being ITA No. 3346/Mum/2013, is directed against the order dated 15-02-2013 passed by the learned Commissioner of Income Tax (Appeals)- 13, Mumbai (Hereinafter called the CIT(A) ), for the assessment year 2009-10. 2. The grounds raised by the Revenue in the memo of appeal filed with the Tribunal read as under:- i) The Learned CIT(A) has erred on facts and in law in directing the Assessing Officer to consider the revised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30/6/2001 -6007658 -6343410 31/12/2002 -13728845 -10972069 31/03/2004 2640656 -10659176 31/03/2005 -8413978 -8507211 31/03/2006 7669896 -9244040 31/03/2007 -16216865 -11910166 31/03/2008 8575212 -13940945 Total 19502170 101461792 The assessee company with respect to the adjustment of brought forward losses to be adjusted, furnished a statement of losses before the AO which was different from the one which was claimed in the return of income and the same was not reconciled with the statement of accounts of the respective years involved, therefore, the A.O. did not consider the same and did not take any cognizance thereof and the book loss was allowed to the assessee company by the AO as per the return of income filed. The A.O. held that the assessee company is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evised figures of year-wise brought forward loss and unabsorbed depreciation for computing book profit u/s 115JB of the Act although the said claim was not in accordance with the claim made by the assessee company in the return of income filed with the Revenue and the CIT(A) decided the issues on merits. 6. Aggrieved by the orders dated 15-02-2013 of CIT(A), the Revenue is in appeal before the Tribunal. 7. The ld. D.R., relied on the order of the A.O. and submitted that the CIT(A) erred in directing the A.O. to consider the revised statement of unabsorbed depreciation and book loss furnished by the assessee for computing book profit u/s 115JB of the Act during the course of assessment proceedings ignoring the fact that the A.O. is bound in law to accept only the claim made by the assessee company in the return of income filed with Revenue. On the other hand, the ld. Counsel for the assessee company submitted that the case of the assessee is squarely covered by the decision of Hon ble Bombay High Court in the case of CIT v. Pruthvi Brokers Shareholders (P) Ltd., (2012) 349 ITR 336 (Bom) whereby the Hon ble Bombay High Court has held that if there is an inadvertent error by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 1999-2000 since the same have expired the term of eight years to be carried forward as per relevant applicable law. Aggrieved by the decision of A.O., the assessee company carried the matter before the CIT(A). The assessee company contended before the CIT(A) that the decision of Hon ble Gujarat High Court in the case of General Motors India P. Ltd. in Civil Appeal Application No. 1773 of 2012 has taken a view different than taken by the ITAT, Special Bench in the case of Times Guaranty Ltd. (supra), after analyzing the existing and amended provision of section 32(2) of the Act and CBDT Circular, the Hon ble Gujarat High Court held that the unabsorbed depreciation is required to be added to the current depreciation for such succeeding years and is deemed to be part thereof. Thus the CIT(A) following the decision of Hon ble Gujarat High Court in the case of General Motors India P. Ltd. (supra), directed the A.O. to consider brought forward unabsorbed depreciation loss of earlier years as part of current year s depreciation and allow deduction as per provisions of the Act. Aggrieved by the above decision of ld. CIT(A), the Revenue is in further appeal before the Tribunal. 11. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r called the First unadjusted depreciation allowance'), which could not be set off up to assessment year 1996-97, shall be carried forward for set off against income under any head for a maximum period of eight assessment years starting from assessment year 1997-98. (ii) Current depreciation for the year under section 32(1) (for each year separately starting from assessment year 1997- 98 up to 2001-02) can be set off firstly against business income and then against income under any other head. (iii) Amount of current depreciation for assessment years 1997-98 to 2001-02 which cannot be so set off as per (ii) above hereinafter called the 'Second unabsorbed depreciation allowance shall be carried forward for a maximum period of eight assessment years from the assessment year immediately succeeding the assessment year for which it was first computed, to be set off only against the income under the head 'Profits and gains of business or profession. C. In the third period (i.e., assessment year 2002-03 onwards). (i) 'First unadjusted depreciation allowance' can be set off up to assessment year 2004-05, that is, the remaining period out of maximum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 assessee cannot be denied. However, Circular No. 14 of 2001 had clarified that under Section 32(2), in computing the profits and gains of business or profession for any previous year, deduction of depreciation under section 32 shall be mandatory. Therefore, the provisions of section 32(2) as amended by Finance Act, 2001 would allow the unabsorbed depreciation allowance available in the A. Y. 1997-98, 1999-2000, 2000-1 and 2001-02 to be carried forward to the succeeding years, and if any unabsorbed depreciation or part thereof could not be set off till the A. y. 2002-03 then it would be carried forward till the time it is set off against the profits and gains of subsequent years. 38. Therefore, it can be said that, current depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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