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2016 (4) TMI 376 - ITAT KOLKATA

2016 (4) TMI 376 - ITAT KOLKATA - TMI - Disallowance of depreciation to be carried forward - revision u/s 263 as the issue of unabsorbed depreciation has not been examined by AO as wrongly allowed to be carried forward by the order of AO - Held that:- As decided in the case of General Motors India (P) Ltd. vs. DCIT [2012 (8) TMI 714 - GUJARAT HIGH COURT ] any unabsorbed depreciation available to an assessee on 1st day of April 2002 (A.Y. 2002-03) will be dealt with in accordance with the provisi .....

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nst the profits and gains of subsequent years, without any limit whatsoever

In this view of the matter, we find that the order passed by Assessing Officer is not erroneous and prejudicial to the interest of revenue. In this view of the matter, we reverse the order of Ld. CIT passed u/s. 263 - Decided in favour of assessee - ITA No. 1513/Kol/2011 - Dated:- 5-2-2016 - N. V. Vasusdevan, JM And Waseem Ahmed, AM For the Appellants : Shri Siddharth Jhajharia, FCA & Shri Sajay Sen, AR Fo .....

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ee in its appeal is that Ld. CIT erred in confirming the assessment order of Assessing Officer by disallowing the depreciation for an amount of ₹ 228,77,86,812/- to be carried forward. 3. Facts of the case are that assessee is a Limited Company is engaged in business of manufacturing and sale of cement. Assessee has shown unabsorbed depreciation amounting to ₹ 228,77,86,812/- in the year under consideration. This depreciation pertains to AY beginning from AY 1992-93 to 2001-02. As pe .....

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d depreciation relating to AYs 1992-93 to 2001-02 have been claimed by assessee. Besides the above, assessee submitted that AO in his order for relevant to AY 2007-08 has already held that unabsorbed depreciation pertaining to assessment year beginning from 1992-93 to 2001-02 for an amount of ₹ 228,77,86,812/- not available to be carried forward. However, assessee has gone in appeal before Ld. CIT(A) against the assessment order which is sub judice. In view of above, assessee submitted tha .....

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ion of ₹ 228,77,86,812/- for AYs 1992-93 to 2001-02 was wrongly allowed to be carried forward by the order of AO because as per the provision u/s 32 sub-section 2 of the Act became effective only from 01.04.2002 and unabsorbed depreciation of ₹ 228,77,86,812.00 pertains to AY prior to the amendment in the IT Act. Accordingly, Ld. CIT held that the order of AO is erroneous and prejudicial to the interest of revenue. Hence, the order of the AO was set aside with a direction to pass afr .....

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ch is running from pages 1 to 29 and relied on the order passed by AO whereas Ld. DR relied on the order passed by Ld. CIT. From the aforesaid discussion, we find that assessee's claim of unabsorbed depreciation pertaining to AYs beginning from 1992-93 to 2001-02 for an amount of ₹ 228,77,86,812/- which was allowed to be carried forward by AO in his order for the relevant AY i.e. 2007- 08 but Ld. CIT found that unabsorbed depreciation was not allowable to be carried forward for a perio .....

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amended by Finance Act, 2001 and not by the provisions of section 32(2) as it stood before the said amendment. Had the intention of the Legislature been to allow the unabsorbed depreciation allowance worked out in A.Y 1997-98 only for eight subsequent assessment years even after the amendment of section 32(2) by Finance Act, 2001 it would have incorporated a provision to that effect. However, it does not contain any such provision. Therefore, the provisions of section 32(2) as amended by Finance .....

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ion amount is larger than the amount of the profits of that business, then such excess comes for absorption from the profits and gains from any other business or business, if any, carried on by the assessee. If a balance is left even thereafter, that becomes deductible from out of income from any source under any of the other heads of income during that year. In case there is a still balance left over, it is to be treated as unabsorbed depreciation and it is taken to the next succeeding year. Wh .....

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