TMI Blog2018 (12) TMI 1687X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, this ground of appeal of the revenue is dismissed. Fresh claim of business expenses - claim made for the first time in return u/s 153A - in original return same was considered as deferred revenue expenditure and 1/10th of deferred revenue expenditure were written off - HELD THAT:- The provisions of the act which would be otherwise applicable in the case of an return filed in the regular course u/s. 139(1) would also continue to apply in the case of a return filed u/s. 153A. We are fully inclined with the findings of the CIT(A) that the claim made for the first time in return u/s 153A is arising out of the AO's own action of disallowance in subsequent years and is thus bona-fide and rightly made and clearly allowable in the facts and circumstances It is demonstrated from the detail of expenses that except ROC fees and listing expenses the expenses are revenue in nature and AO has not given any basis that the expenditure is capital in nature. After considering the above we are inclined with the Ld.CIT(A) that because of disallowing the original claim of deferred revenue expenses the assessee has rightly raised the alternate claim of expenses incurred during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue. First ground of appeal: carry forward of unabsorbed depreciation of ₹ 3,74,81,609/- 5. During the course of assessment proceedings, the assessing officer noticed that assessee has claimed unabsorbed depreciation during the year under consideration. He has further noticed that as per return of income, the assessee has business loss and unabsorbed depreciation of previous years and set off has been claimed by the assessee for the losses on account of depreciation incurred by it in assessment year 1995-96 1996-97. He further noticed that the assessee has shown business income of ₹ 22,26,622/- and claimed set off for business losses for assessment year 1998-99. He has observed that the assessee has carried forward the entire depreciation loss of ₹ 6,32,30,622/- to the next assessment year. The assessing officer was of the view that un-absorbed depreciation prior to assessment year 2003-04 was allowed to be carried forward as normal business loss therefore, the assessee cannot claim benefit of unabsorbed depreciation once 8 years are lapsed. Consequently, the assessing officer had determined the unabsorbed depreciation to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by the decision of the Jurisdiction HC in Gujarat Themis Biosyn Ltd. (supra) as also by General Motors (supra), in favour of the appellant, as it has clearly been held therein that in view of circular no. 14 of 2001, the unabsorbed depreciation for the intervening period of and from AY 95-96 to AY 2001-02 got carried forward to AY 02-03 and thereafter got merged therewith and became part thereof, thus eligible for further and unrestricted carry forward. Thus, and therefore, the appellant is held eligible for unlimited carry forward and set-off of depreciation as claimed, subject however, to the correct quantum and quantification of such carry forward on the basis of such claims made and allowed in respective returns of income filed for AY 95-96 to 2001- 02 to be properly verified by the AO. 7. We have heard both the sides and perused the material on record carefully. The issue is pertained to the claim of set-off of carried forward depreciation, brought forward from AY 95-96 to AY 2001-2002.We consider that the impugned issue in appeal is clearly covered by the decision of the Jurisdiction HC in Gujarat Themis Biosyn Ltd. and by General Motors , in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs could be set off in subsequent years without any set time limit. In view of the above judicial pronouncement on the issue and the elaborate findings of the ld. CIT(A), we do not find any reason to interfere in the decision of the ld. CIT(A). Respectfully following the decision of the Hon ble High Court of Gujarat and the Co-ordinate Bench as supra, we do not find any error in the finding of ld. CIT(A) holding that the assessee is held eligible for unlimited carry forward and set-off of depreciation as claimed, subject however, to the correct quantum and quantification of such carry forward on the basis of such claims made and allowed in respective returns of income filed for AY 1995-96 to 2001-02 to be properly verified by the AO. Therefore, this ground of appeal of the revenue is dismissed. Second ground of appeal: fresh claim of business expenses of ₹ 6211877/- 8. During the course of appellate proceedings before ld. CIT(A), it was submitted that assessee has incurred certain revenue expenses during the year which had been capitalized as deferred revenue expenditure and 1/10 of the same were claimed as expens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant has, for raising the Tresh' claim of allowance, drawn support only from the observations, findings and consequent disallowance of the claims of 1/10 deferred revenue expenditure in subsequent years (also under appeal with me) wherein for those years the disallowances have not been made precisely for the reason that the expenditure pertains to previous period. The Ld. AO has neither doubted, nor brought any adverse material on record to question the basic allowability of claim u/s 37. Thus, the claim made for the first time in return u/s 153A is arising out of the AO's own action of disallowance in subsequent years and is thus bona-fide and rightly made and clearly allowable in the facts and circumstances. The details of the claim as tabulated above and as submitted before me also clearly indicate the allowability u/s 37 as revenue expenses excepting a small amount of ROC fees and listing expenses of Rs. l,19,212/-which clearly are capital in nature. The appellant also submitted that there is no material tax-effect if the expense is allowed in the year of incurring as against the year of claim as deferred revenue expense. I am persuaded by the contentions raised on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure as 1/10 of such expenses. The assessee has made this alternative claim of expenses after the assessing officer has disallowed its claim of deferred revenue expenditure without any proper reason. During the course of appellate proceedings before ld. counsel has also placed reliance in the case of CIT vs. B.G. Shirka Construction Technology Pvt. Ltd. (2017) 395 ITR 371. Vide above referred judgment, the hon ble high court of Bombay has held that the asseeee is required to furnish fresh return of income for each of the six assessment years in regard to which a notice has been issued u/s. 153A(1) of the act. Section 153A(1) itself provides that on filing of the return consequent to notice the provision of the act will apply to the return of income so filed. Consequently, the return filed u/s. 153A(1) of the act is a return furnished in 139 of the act. Therefore, the provisions of the act which would be otherwise applicable in the case of an return filed in the regular course u/s. 139(1) of the act would also continue to apply in the case of a return filed u/s. 153A of the act. We are fully inclined with the findings of the Ld.CIT(A) that the claim made for the first time in ret ..... X X X X Extracts X X X X X X X X Extracts X X X X
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