TMI Blog2015 (1) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... ears has been quantified in the order passed u/s.143(3) dated 31-12-2008 for A.Y. 2006-07 and since the AO has simply followed that order while giving set off of unabsorbed depreciation loss for the A.Y. 2007-08, therefore, the order in our opinion cannot be said to be erroneous. Thus it is not a fit case for assuming jurisdiction u/s.263 of the I.T. Act. - Decided in favour of assessee - ITA No. 1044/PN/2012 - - - Dated:- 29-1-2015 - <!--[if gte mso 9]> <![endif]--> <!--[if gte mso 9]> Normal 0 false false false EN-IN X-NONE <![endif]--><!--[if gte mso 9]> ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation to the extent of ₹ 87,08,64,394/- for A.Y. 2007-08 as the unabsorbed depreciation pertaining to A.Y. 1974-75 to A.Y. 1996-97 amounting to ₹ 87,08,64,394/- cannot be carried forward more than 8 assessment years, i.e. beyond A.Y. 2004-05 in this case. He therefore issued a notice asking the assessee to explain as to why the order passed u/s.143(3) should not be set-aside. It was explained that whether the unabsorbed depreciation of ₹ 87,08,64,394/- relating to A.Y. 1974-75 to 1996-97 is allowable beyond 8 years or not is a debatable/disputed issue and therefore cannot be the criteria for revision of assessment framed u/s.143(3) of the I.T. Act. 2.1 However, the Ld.CIT was not satisfied with the explanation given by the assessee. He held that the AO without any application of mind has allowed excess set off of depreciation amounting to ₹ 87,08,64,394/-. Therefore, the assessment order is erroneous as well as prejudicial to the interest of the revenue. He, therefore, setaside the issue to the file of the AO with a direction to pass the order afresh after giving due opportunity of being heard to the assessee. The relevant observation of the Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would have ordinarily required inquiry as to whether it is hit by s.36(1)(v), s.43(2) and s.40A(7) of the IT Act and the rulings precedents on the subject. The Tribunal held that the jurisdiction u/s 263 was justified. The Allahabad High Court in the case of CIT Vs Shri Bhagwandas 272 ITR 367 following Malabar Industrial Company Ltd. (SC) held that grant of exemption without application of mind in respect of claims of exemption for certain receipts as agricultural income and income from poultry farm would constitute error and prejudice to the revenue, and therefore, the revision by the CIT u/s 263 was upheld. Reliance is also placed on the following judgments wherein it was held that failure of the AO to examine the issue amounts to an error prejudicial to Revenue and the CIT could assume jurisdiction, subject to the condition that there was error and prejudice to the revenue : (i) GEE Vee Enterprises vs Addl. CIT 99 ITR 375(Del.) (ii) CIT vs Emery Stone Mfg Co. 213 ITR 843(Raj.) (iii) Duggal Co. vs CIT 220 ITR 456(del.) (iv) Thermal System(Hyd.) Pvt. Ltd. vs. ACIT Income Tax Act 270(H) 2006 dtd.15.2.2008. As regards the assessee's contention that the issue is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k, he drew the attention of the Bench to the order dated 30-12-2008 passed u/s.143(3) for the A.Y. 2006-07 and drew the attention of the Bench to the carried forward losses as determined by the AO which is as under : A.Y. Business loss Depreciation loss Total 1974-75 to 1999-00 -- 103,40,20,296 103,40,20,296 2005-2006 -- 8,77,94,554 8,77,94,554 2006-2007 5,07,23,877 4,64,07,974 9,71,31,851 He submitted that the AO based on the order passed u/s.143(3) for the preceding assessment year has given the set off of brought forward losses of earlier year. Therefore, mistake, if any has occurred in the order of the preceding assessment year and not in this year. He submitted that although no specific question was raised by the AO on this issue, however, the fact remains that an order in the preceding assessment year has been passed determining the amount to be carried forward towards business loss and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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