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2017 (2) TMI 324 - ITAT AHMEDABAD

2017 (2) TMI 324 - ITAT AHMEDABAD - TMI - Claim of set off of brought forward unabsorbed depreciation pertaining to AY 1999-2000 against the income of AY 2008-09 - Held that:- Respectfully following the judgment of Hon. Jurisdictional High Court in the case of Gujarat Themis Biosyn Ltd. (2014 (5) TMI 194 - GUJARAT HIGH COURT) and in the case of General Motors India P. Ltd. (2012 (8) TMI 714 - GUJARAT HIGH COURT ) we are of the view that as per the provisions of sec.32(2) of the Act as amended by .....

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er. This appeal of Revenue for Asst. Year 2008-09 is directed against the order of ld. CIT(A)-II, Rajkot, dated 26/03/2013 vide order No.CIT(A)-II/RJT/0077/10-11 arising out of order u/s 143(3) of the IT Act, 1961 (in short the Act) framed on 24/12/2010 by ACIT, Gandhidham Circle, Gandhidham (Kutch). 2. The only ground in this appeal raised by the Revenue is against the order of ld. CIT(A) allowing assessee s claim of set off of brought forward unabsorbed depreciation of ₹ 2,95,27,925/- pe .....

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115JB of the Act at ₹ 8,14,04,114/-. The case was selected for scrutiny assessment and notice u/s 143(2) of the Act was issued on 25.08.2009, followed by notice u/s 142(1) of the Act. Against the income of ₹ 2,18,70,576/- the assessee claimed set off of unabsorbed depreciation of ₹ 2,95,27,925/- which was brought forward from A.Y. 1999-2000. Such set off of unabsorbed depreciation brought forward from Asstt. Year 1999-2000 was disallowed/denied to the appellant on the ground th .....

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accordingly, disallowed the claim of setting off of unabsorbed depreciation. 4. The assessee carried the matter in appeal before ld. CIT(A) and succeeded as the impugned disallowance was deleted. 5. Aggrieved, Revenue is now in appeal before the Tribunal.. 6. At the out set ld. Authorised Representative (AR) submitted that the issue in this appeal is squarely covered in favour of assessee by the judgment of Hon. Jurisdictional High Court in the case of CIT vs. Gujarat Themis Biosyn Ltd. vide Tax .....

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judgment relied on by the ld. AR. Solitary grievance of the Revenue is against the order of ld. CIT(A) allowing the assessee s claim of setting off of brought forward unabsorbed depreciation of ₹ 2,95,27,925/- pertaining to Asst. Year 1999-2000 against the income of Asst. Year 2008-09. We observe that during the course of assessment proceedings ld. Assessing Officer raised question against the claim of setting off of unabsorbed depreciation of ₹ 294,27,925/- of brought forward from A .....

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of 8 years from the Asstt. Year in which such un-absorbed depreciation was first computed. In this regard we would like to submit that the law as existing on first day of the relevant Asstt Year in which such set off is claimed has to be seen and in that view of the matter Section 32(2) as substituted in the Asstt. Year under consideration would be applicable according to which the un-absorbcd depreciation of the earlier year will become part and parcel of the current year depreciation and the .....

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of the Asstt year is to be applied we relied on the decision of Hon. Supreme Court in the case of Karimtharuvi Tea Estate Ltd. Vs. State of Kara la 60 ITR 262 (SC) and Reliance jute & Industries Ltd. Vs CIT120 ITR 921 (SC), In view of the above said legal position we request your honour to kindly consider provision of Section 32(2) as applicable for the Asstt. Year under consideration i.e. Asstt. Year 2008-09 and accordingly allowed us such set off to which we are very much entitled and dro .....

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of 8 year has elapsed, set off of brought forward unabsorbed depreciation of ₹ 2,94,27,925/- to the extent of balance income for the Asst. Year 2008-09 of ₹ 2,18,70,576/- and balance of ₹ 75,57,349/- claimed to be carried forward are irregular and needs to be disallowed. 10. We further observe that when the issue came up before ld. CIT(A) the same was decided in favour of assessee by relying on the judgment of Hon. Jurisdictional High Court in the case of General Motors India .....

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out giving any opportunity to the appellant to explain the same thereby breaching the principle of natural justice. 5.1 The A.O. has allowed the brought forward business loss of A.Y. 01-02 to the tune of ₹ 29,77,230/- instead of ₹ 30,82,831/-, This has been done by the A.O. by taking the details as per statement E of brought forward loss/ depreciation. 5.2 The appellant has contended that no opportunity was provided to him to explain such difference and clarify the issue to the Ld. A .....

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#8377; 30,82,831/- as against ₹ 29;77,230/- allowed in the assessment order. This ground of appeal is' allowed. Ground No.2 : The Learned Assessing Officer has further erred in law as well as on facts in denying the set off of Brought forward unabsorbed depreciation of Asstt. Year J 999-2000 amounting to . ₹ 2,94,27,925/- against the income of current year and carry forward of balance amount for the next Asstt. Year. 6,0 The appellant had claimed the set off of brought forward un .....

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40 SOT 14. The appellant made various submissions on this issue. However, in his last submission, the appellant submitted that this issue is squarely covered by the decision of the Hon'ble Gujarat High Court in SCA No.1773 of 2012 in the case of General Motors_India P. Ltd. Vs. DCIT .(2012) 210 Taxman 20. In the said decision, the Hon'ble Gujarat High Court has reversed the decision of Mumbai Special Bench of ITAT in the case of DCIT vs. Times Guarantee (supra). It is held by the Hon' .....

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the intent of the amendment that it is for enabling the industry to conserve sufficient funds to replace plant and machinery and accordingly the amendment dispenses with the restriction of 8 years for carry forward and set off of unabsorbed depreciation. The amendment is applicable from assessment year 2002-03 and subsequent years. This means that 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 provisions o .....

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ent of section 32(2) of the Act, a purposive 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 the as .....

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d depreciation or part thereof could not be set off till the A.Y. 2 002-03 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 is deductible in the first place from the income of the business to which if relates. If such depreciation 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 bus .....

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is deemed as part thereof. If, '"-":- however, there is no current depreciation for such succeeding year, the unabsorbed .depreciation becomes the depreciation allowance for such succeeding year. We are of the considered opinion that 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 provisions of section 32(2) as amended by Finance Act, 2001. And once the Circular No. 14 of 2001 clarified that the .....

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appellant's case are fully covered by this decision of the Hon'ble Gujarat High Court which is, being jurisdictional High Court binding in nature on the undersigned. The A.O. is directed to allow the carry forward and set off of unabsorbed depreciation of ₹ 2,94,27,925/- for A.Y. 99-2000 while computing the income for the year under consideration. This ground of appeal is allowed 11. We further observe that Hon. Jurisdictional High Court in the case of CIT vs. Gujarat Themis Biosyn .....

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