TMI Blog2021 (7) TMI 1244X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. [ 2008 (11) TMI 438 - ITAT MUMBAI]. As against this, the Assessing Officer rejected the claim of assessee following aggregation approach, as reflected in the Balance Sheet. Per approach of Assessing Officer there would be no unabsorbed depreciation/business losses available for adjustment under section 115JB of the Act. There are two school of thoughts in computing set off of unabsorbed depreciation/business losses i.e. year to year basis vs aggregation. Both views are possible as per the language of Explanation- 1 clause (iii) to section 115JB (1) of the Act. This makes the issue debatable. The method adopted by the assessee at the time of filing return was one of the acceptable view. Ergo, the assessee is able to furnish re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted against the order of Commissioner of Income Tax (Appeals)-9, Mumbai ( in short the CIT(A) ) dated 17/12/2018 for the assessment year 2004-05 confirming levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 ( in short the Act ). 2. Shri Yogesh Thar appearing on behalf of the assessee submitted that in assessment proceedings under section 143(3) of the Act, the Assessing Officer while computing book profit under MAT provisions disallowed assessee s claim of brought forward unabsorbed depreciation and levied penalty under section 271(1)(c) of the Act. The ld. Authorized Representative for the assessee submitted that in the Financial Fear 2002-03, the assessee suffered loss of ₹ 75,83,118/- and also had unabsorbed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contended that Pune Bench of the Tribunal in the case of Kirloskar Ferrous Industries Ltd. vs. Addl. CIT in ITA No.519/PUN/2009 for assessment year 2005-06 decided on 30/11/2011 has taken a view in favour of aggregation approach. On the other hand, in the case of Amline Textiles Pvt. Ltd. (supra) the Tribunal has approved year to year basis approach. These two divergent views taken by different benches of Tribunal makes the issue contentious. 2.2. The ld. Authorized Representative for the assessee pointed that in the case of ACIT vs. Arvind Mills Ltd. in ITA No.3440/Ahd/2010 for assessment year 2004-05 decided on 05/08/2011 the Revenue had assailed the order of CIT(A) in deleting the addition made by Assessing Officer rejecting assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in law, issue being debatable. 2.3. The ld. Authorized Representative for the assessee submitted that the above decisions of the Tribunal clearly show that the issue on which penalty under section 271(1)(c) of the Act has been levied in the instant case is debatable, hence, penal provisions under section 271(1)(c) of the Act are not attracted. 3. Per contra, Ms. Shreekala Pardeshi representing the Department vehemently defended the order of CIT(A) in confirming levy of penalty. The ld. Departmental Representative submitted that the assessee while computing books profit under section 115JB has wrongly claimed unabsorbed depreciation of immediately preceding assessment year. The Assessing Officer found that there was no brought forward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed depreciation of ₹ 33.82 lacs) during the Financial Year 2002-03. As per provisions of section 115JB of the Act, the assessee claimed unabsorbed depreciation i.e. ₹ 33.82 lacs being less than the business loss as deduction under section 115JB of the Act. The assessee made claim on the premise that business loss/unabsorbed depreciation were to be considered on year to year basis. The assessee in support of its computation of claim placed reliance on the decision of Tribunal in the case of Amline Textiles Pvt. Ltd. (supra). As against this, the Assessing Officer rejected the claim of assessee following aggregation approach, as reflected in the Balance Sheet. Per approach of Assessing Officer there would be no unabsorbed depreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was rendered by the Tribunal on 04/11/2008 and it pertains to AY 2003-04. The said decision supports the view taken by assessee. Thus, the method adopted by the assessee at the time of filing return was one of the acceptable view. Ergo, the assessee is able to furnish reasonable explanation in making a claim of unabsorbed depreciation while computing book profits u/s 115JB of the Act. In light of the fact discussed above coupled with the fact that divergent views have been expressed by the Tribunal on the issue of treating unabsorbed depreciation/business loss of preceding assessment years while computing book profits u/s 115JB, makes the issue debatable. Hence, no penalty under section 271(1)(c) of the Act can be levied on such disallowanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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