TMI Blog2015 (12) TMI 1682X X X X Extracts X X X X X X X X Extracts X X X X ..... iving fair and reasonable construction to the language of the section without leaning to the side of the 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 assessee cannot be denied We find that this particular issue has been the subject matter of huge debate and dispute and also gave rise to the creation of special bench by the tribunal to adjudicate this issue which goes to prove that the issue is highly debatable and hence cannot be the subject matter of rectification proceedings u/s 154 of the Act. In our opinion, what could be rectified u/s 154 of the Act is a mistake which must be obvious and patent and not something which can be established by a long drawn process of reasoning as has been held by the Hon’ble Supreme Court in the case of T.S.Balaram, ITO vs Volkart Bros (1971 (8) TMI 3 - SUPREME Court ). Thus AO clearly erred in adjudicating this highly debatable issue under rectification proceedings u/s 154 of the Act which is not permissible and accordingly we quash the said order. - Decided in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 154 of the Act. The particulars of mistake sought to be rectified was stated to be Mistake in set off of unabsorbed brought forward depreciation of earlier years . According to Learned AO, the brought forward unadjusted depreciation allowance upto Asst Year 1996-97 which could not be set off upto Asst Year 1996-97, shall be carried forward for set off against income under any head for a maximum period of 8 assessment years commencing from Asst Year 1997-98 and therefore, such unadjusted depreciation allowance can only be set off upto Asst Year 2004-05 and not thereafter. 3.1. The assessee vide its letter dated 9.3.2011 explained that the Learned AO should have adjusted the brought forward business losses for the Asst Year 1997-98 and onwards in preference to set off of the unabsorbed depreciation. The Learned AO however, while passing the rectification order u/s 154 allowed the claim for setting off the unabsorbed business losses for the Asst Year 1999-2000 as against the assessee s claim for set off the unabsorbed business losses brought forward from Asst Year 1997- 98 and onwards. The Learned AO in the order passed u/s 154 by placing reliance on the decision of the Mum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, the only possible action that could be taken by the Learned AO is to take recourse to section 154 of the Act, more so when the issue involved is only allowability of brought forward unabsorbed depreciation and business losses to be carried forward. He placed reliance on the decision of the Hon ble Kerala High Court in the case of K.K.J.Foundations vs ADIT (Exemptions) reported in (2015) 62 taxmann.com 178 (Kerala) with regard to the purview of section 154 of the Act. Accordingly, he argued that there is no infirmity in the order passed by the Learned AO. 6. In response to this, the Learned AR argued that the impugned issue is squarely covered in favour of the assessee by the decision of the Hon ble Gujarat High Court in the case of General Motors India P Ltd vs DCIT reported in (2012) 25 taxmann.com 364 (Guj). He further argued that in any case, the Learned AO ought not to have disturbed the brought forward unabsorbed depreciation losses in the proceedings u/s 154 of the Act pursuant to the amendments in section 32(2) of the Act by Finance Act 1996 and again by Finance Act 2001 as the impugned issue is highly debatable which even gave rise to a substantial question of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the said amendment. We find that no specific provision has been incorporated by the Finance Act 2001 in section 32(2) of the Act restricting the allowability of carry forward of unabsorbed depreciation loss upto Asst Year 1996-97 as available to be set off only for a period of 8 years. Hence we hold that the purposive and harmonious interpretation has to be taken keeping in view the intention of the amendment of section 32(2) of the Act by Finance Act 2001. We hold that 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 the 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 assessee cannot be denied. We also gain support from our understanding of this amended provision of section 32(2) of the Act from the decision of Hon ble Gujarat High Court in the case of General Motros India Pvt Ltd vs DCIT reported in (2012) 25 taxmann.com 364 (Guj), wherein it was held that :- .. .. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We find that the decision rendered by Hon ble Gujarat High Court (supra) had discussed the impugned issue in post amendment period and would be applicable to the facts of the instant case. In any event, it is very well settled that when there are two conflicting decisions on an issue of the same court or different courts, then the decision that is favourable to the assessee has to be applied. Reliance in this regard is placed on the decision of Hon ble Apex Court in the case of Vegetable Products reported in 88 ITR 172 (SC). In view of the above, we find no infirmity in the order passed by the Learned CIT(A) on merits of the issue. 7.2. In any case, we find that this particular issue has been the subject matter of huge debate and dispute and also gave rise to the creation of special bench by the tribunal to adjudicate this issue which goes to prove that the issue is highly debatable and hence cannot be the subject matter of rectification proceedings u/s 154 of the Act. In our opinion, what could be rectified u/s 154 of the Act is a mistake which must be obvious and patent and not something which can be established by a long drawn process of reasoning as has been held by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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