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TMI Blog2021 (7) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... opening balance and added to the value of closing stock. (b) The assessee has consistently followed provisions of Sec. 145A and valued closing stock on net cost methods. (c) Debit balance cannot be considered as income. (d) Debit balance in MODVAT account is at par with balance in PLA account. (e) The assessee may not necessarily utilized and no refund is granted. 3. The appellant therefore prays that the addition of Rs. 1,02,12,123/- made may be deleted Ground 2: 1. On the facts and circumstances of the case, and in law, CIT(A) erred in confirming the addition of 39,83,500/- u/s 50C on account of sale of property below stamp duty valuation. 2. The Ld. CIT(A) failed to appreciate the fact that a. The impugned assets was depreciated assets b. The property sold during the year was not in usable condition and hence sold at whatever rate it could fetch. 3. The appellant therefore prays that the addition made be deleted. 2. The Brief facts of the case are that, the assessee company is engaged in the business of manufacture of chemicals and LST. The assessee has filed the return of income on 14.10.2010 declaring a total loss of Rs. 11,41,76,879/-. Subsequently, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titled to carry forward unabsorbed depreciation of Rs. 43,70,38,442/- for the period 1996- 97 to 2001-12 to be set off against income. Finally the A.O. has assessed the total loss of Rs. 4,56,41,858/- and passed the order u/s 143(3) of the Act dated 21.01.2013. 4. Aggrieved by the order, the assessee has filed an appeal before the CIT(A). The Ld. CIT(A) considered the grounds of appeal, findings of the A.O, and the assesses submissions. Whereas on the disputed issue of addition on account of increase in Modvat credit u/s145A of the Act. The CIT(A) has dealt on the provisions and facts at page 4 to 9 of the order and confirmed the addition. On the second issue in respect of addition on account of difference in market value and sale value of depreciable capital asset, the CIT(A) has confirmed the addition. Whereas, in respect of carry forward of unabsorbed depreciation for the period AY 1996-97 to 2001-02,the CIT(A) has dealt on the provisions and relied on the Hon'ble High Court and Hon'ble Tribunal decisions and directed to allow the carry forward of unabsorbed depreciation and partly allowed the assesses appeal. Aggrieved by the CIT(A)order, the assessee has filed an appeal bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to addition u/s 50C of the Act the contention of the Ld.AR that the assessee company has become a sick industrial company and the assets were being sold to cut down the costing and repayment of the loans. We find that in the assessment proceedings the assessee has filed the explanations on sale of depreciable Assets units is Chennai, which was unused for years and was in an unusable condition Further on verification of agreements filed in the course of hearing,we find that the assessee has sold depreciable assets being building and the same was mentioned before the lower authorities. 8. Whereas the Ld.AR has relied on the BIFR order and the assessee company financials with negative net worth. We find that there is no bifurcation of value of building which is depreciated over the period of time. The A.O. has pointed out only difference aspect but the fact remains the assessee company has become sick company and burdened with financial difficulties and the net worth has become negative. The assessee company has made a distress sale at realizable price, which is justified considering the financial constrains and the circumstances of selling the depreciable asset and was in an unus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d depreciation allowance'), which could not be set off up to the assessment year 1996-97, shall be carried forward for set off against income under any head for a maximum period of the eight assessment years, starting from the assessment year 1997-98. (ii) Current depreciation for the year under section 32(1) each year separately starting from the assessment year 1997-98 up to 2001-02) can be set off firstly against business income and then against income under any other head. (iii) Amount of current depreciation for the assessment years 1997- 98 to 200102 which cannot be so set off as per (ii) above, hereinafter called the 'Second unabsorbed depreciation allowance' shall be carried forward for a maximum period of eight assessment years from the assessment year immediately succeeding the assessment year for which it was first computed, to be set off only against the income under the head Profits and gains of business or profession'. C. In the third period (i.e., the assessment years 2002-03 onwards) (i) First unadjusted depreciation allowance' can be set off up to the assessment year 2004-05, that is, the remaining period out of maximum period of eight a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reciation is not in agreement with the judgment. Further, there is no justification in invoking the judgment in the current assessment when there is neither any other income adjusted nor any set off claimed. It was further contended that Hon'ble Gujarat High Court in the case of General Motors India (P) Ltd. vs. CIT (354 ITR 0244) has negated the above Tribunal judgment and the application of Gujarat High Court decision over the Special bench decision has also been clarified by Hon'ble Mumbai ITAT in the case of DCIT Vs. Bajaj Hindustan Ltd. [149 ITR 079 (Mum)]. In view of the above, it was contended that the said noting of disallowance of carry forward of depreciation may be deleted. 9.4 I have considered the facts of the case, have perused the assessment order, material available on record and taken into account the oral contentions and written submissions made by the appellant in this regard. The Hon'ble Gujarat High Court has in the case of General Motors India Pvt. Limited (354 ITR 244) clearly held that the unabsorbed depreciation pertaining to A.Y.1997-98 to A.Y.2001-02 will be carried forward to A.Y.2002-03 and as a result become part thereof in terms of the p ..... 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