TMI Blog2019 (6) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... - DELHI HIGH COURT] - Decided in favour of assessee. - ITA. No. 932/JP/2018, ITA. No. 933/JP/2018 - - - Dated:- 31-5-2019 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri S. R. Sharma And Shri Rajnikant Bhatra (C.A) For the Revenue : Dr Ran Singh (Addl. CIT) ORDER PER: VIKRAM SINGH YADAV, A.M. These are two appeals filed by the respective assessees for the Assessment Year 2015-16 against the orders of ld. CIT(A)-4, Jaipur dated 25.04.2018 16.04.2018 respectively. Since the common issues are involved, both these appeals were heard together and are disposed off by this consolidated order. 2. In ITA No. 932/JP/2018, the assessee has taken the following grounds of appeal. 1. That the ld. CIT(A) is wrong and has erred in law in confirming the order u/s 154 passed by AO which is not sustainable in law as there was no mistake apparent from record within the meaning of Section of I. T. Act, 1961. 2. The without prejudice to ground No. (1) above the Ld. CIT (A) is wrong and has erred in law in confirming the actio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Pr. CIT, Alwar vs. M/s Ginni International Ltd., Alwar (in DBIT Appeal No. 131 of 2017 dated 5.12.2017) has decided the matter in favour of the assessee and SLP filed by the Department has since been dismissed by the Hon ble Supreme Court of India vide its order dated 13.07.2018. It was further submitted that similar view has been taken by the Coordinate Bench in case of ACIT vs. Emgee Cables Communication Ltd. (in ITA No. 357/JP/2014 vide its order dated 31.03.2017). It was further submitted that the ld CIT(A)- 4, Jaipur in his subsequent decision in another case of M/s Kanhaiya lal Rameshwar Das (Appeal No. 175 176/2017-18 dated 30.01.2019) has since decided the matter in favour of the assessee and therefore, the said decision also support the case of the assessee company. 6. Per contra, the ld. DR relied on the finding of the lower authorities. 7. We have heard the rival contentions and pursued the material available on record. Undisputedly, the matter is covered in favour of the assessee by the decision of the Hon ble Gujarat High Court as well as Hon ble Rajasthan High Court. The Co-ordinate Bench (speaking through one of us) had an occas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h reads as under:- 35. Section 32 (2) of the Act was amended by Finance Act, 2001 and the provision so amended reads as under:- Where, in the assessment of the assessee, full effect cannot be given to any allowance under sub-section (1) in any previous year, owing to there being no profits or gains chargeable for that previous year, or owing to the profits or gains chargeable for that previous year, owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of sub-section (2) of section 72 and subsection (3) of section 73, the allowance or the part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following previous year and deemed to be part of that allowance, or if there is no such allowance for that previous year, be deemed to be allowance of that previous year, and so on for the succeeding previous years. 36. The purpose of this amendment has been clarified by Central Board of Direct Taxes in the Circular No. 14 of 2001. The relevant portion of the said Circular reads as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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 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 u/s 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, 2000-01 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 is deductible in the first place from the income of the business to which it relates. If such depreciation amount is larger than the amount of the profits of that business, then such excess come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f subsequent decision of the Hon ble Gujarat High Court in case of General Motors (supra), the decision of Special Bench in case of Times Guaranty (Supra) is no more a binding precedent. A similar view has been taken by the various coordinate Benches. Further, no contrary jurisdictional or other authority has been quoted before the Bench. In view of the above and respectfully following the decision of the Hon ble Gujarat High Court, we are unable to agree to the contention of the Revenue. In our view, it is the amended section 32(2) of the Act that shall apply in relation to unabsorbed depreciation pertaining to A.Y. 2000-01 and A.Y 2001-02 and the restriction of 8 years which was in force till the law was amended by the Finance Act 2001 does not apply. In the instant case, it is not in dispute that the unabsorbed depreciation pertaining to A.Ys 2000-01 and 2001-02 have not been set off in the earlier years and the same is being carried forward to the year under consideration for being set off. In light of above, ground taken by the Revenue is dismissed. 8. The decision of the Hon ble Gujarat High Court in case of General Motors (supra), as followed by us in above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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