TMI Blog2023 (4) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... lls could not be produced at the time of hearing. Besides that the books of accounts were subject to audit at various levels and its final accounts were also audited by Comptroller and Auditor General of India and no adverse comments has been made by such Govt. Authority. In such a situation, disallowance made under the head of store purchases cannot be sustained. Decided in favour of assessee. CIT(A) enhanced disallowance made by AO - enhancement notice u/s 251(1) read with section 251(1)(2) to show cause that if TDS was not deducted - Non deduction of TDS u/s 194C - Disallowance under the head contractual expenses - HELD THAT:- Appellant correctly objected to such notice issued by the ld. CIT(A) stating that it is barred by limitation as no fresh enquiry could be done by the ld. AO since the ld. CIT(A) powers are co-terminus with that of assessing officer and requested for dropping of such proceeding. TDS on such persons were duly deducted at the time of making such payment in the subsequent years and they have filed complete evidence in this regard to prove the fact. As relying on case of Sri Binay Kumar Singh [ 2020 (7) TMI 825 - ITAT KOLKATA] as held that enhancemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for A. Y. 2002-03 and onwards are different. Pre-amendment treatment up to A.Y. 1996-97. Current year's depreciation i.e. current depreciation u/s 31(1) can be set off against income under any head within the same year and unabsorbed depreciation is to be carried forward to subsequent year and in the subsequent, year it will be treated as current deprecation in addition to the subsequent year's depreciation. Post 1996 amendment treatment for A.Y. 1997-98 to A.Y. 2001-02 (i) First unadjusted depreciation allowance for A.Y. 1997-98 shall be carried forward for set off against income under any head for a maximum period of 8 A.Y. starting from A.Y. 1997-98. (ii) Current depreciation for the year u/s 32(1) (for each year separately starting for A.Y. 1997-98 to A.Y. 2001-02) can be set off firstly against business income and then against income under any other head. (iii) Amount of current depreciation for A.Y. 1997-98 to 2001-02 which could not be set off, called the second unabsorbed depreciation allowance shall be carried forward for a maximum period of eight A.Y. - shall be set-off only against income under the head profit and gain o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us of the employees, the excess payment cannot be ruled out. 3. Brief facts of the case are that the appellant produces coal and is a wholly owned subsidiary of Coal India Limited filed its return of income through e-filing on 26.09.2008 declaring total income at Nil. The assessee filed the revised return of income on 19.02.2009. The case of the assessee was selected for scrutiny assessment and notices u/s 143(2) as well as u/s 142(1) were issued to the assessee. The ld. AO on the examination of the books of accounts made the following additions/disallowances: Sl. No. Description Amount (Rs.) 1 Disallowance of depreciation 33,77,40,312/- 2 Stock difference 49,47,59,000/- 3 Disallowance out of repairs maintenance 7,41,75,000/- 4 Repair of building and plant machinery for pay office 2,62,24,766/- 5 Repairs and maintenance 2,06,44,292/- 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001. And once the Circular No. 1004 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from A.Y. 1997-98 upto the A.Y. 2001-02 got carried forward to the assessment year 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act, 2001 and were available for carry forward and set off against the profits and gains of subsequent years without any limit whatsoever. 8. In the light of the judicial precedents on the issue especially that of the Hon ble Gujarat High court in the case of General Motors India Pvt. Ltd. (supra), we find that the issue is covered in favour of the assessee, therefore, the ground taken by the revenue is rejected and the order passed by the ld. CIT(A) in respect of instant issue is sustained. 9. Another issue raised by the revenue before us in respect of store purchase of Rs. 6,78,69,000/- made by the assessee and same has been allowed by the ld. CIT(A) in his order although assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so audited by Comptroller and Auditor General of India and no adverse comments has been made by such Govt. Authority. In such a situation, disallowance made by the AO of Rs. 6,78,69,000/ under the head of store purchases cannot be sustained. In our considered opinion, the ld. CIT(A) rightly allowed the claim of the assessee under the head of store purchase to the extent of Rs. 6,78,69,000/-. Accordingly, we sustained the order passed by the ld. CIT(A) and ground raised by the revenue is dismissed. Since we have dismissed the revenue s appeal and the cross-objection filed by the assessee stands allowed. 11. Now, we would like to decide ITA No. 290/Ran/2017. 12. In the instant appeal, the assessee has raised the following grounds of appeal: 1. For that the ld. CIT(A) was not justified in making the addition of Rs. 22,53,48,000/- by disallowance under the head contractual expenses. Ld. AO had made disallowance of Rs. 7,41,75,000/-. Ld. CIT(A) enhanced disallowance made by ld. AO to Rs. 22,53,48,000/- on the grounds that TDS was not deducted in violation of provision of section 40(a)(ia). The disallowance made is unjustified and illegal. Ld. CIT(A) was not justified in makin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT(A) has to enhanced the disallowance made by the ld. AO to Rs. 22,53,48,000/- on the ground that TDS was not deducted which was a violation of provisions of section 40(a)(ia) of the Act. The contention of the ld. AR, in this regard is that in the month of November, 2013 an audit objection was raised in respect of non-deduction of TDS u/s 194C on the entire amount of expenses of Rs. 23,53,48,000/- claimed by the assessee but no action was taken upon the assessee by the department on such issue. However, during the course of appellate proceedings, the ld. CIT(A) has issued an enhancement notice to the appellant vide letter dated 26.05.2017 u/s 251(1) read with section 251(1)(2) to show cause that if TDS was not deducted u/s 194 and for this reason the amount of Rs. 22,53,48,000/- claimed as contractual expenses in respect of assessee should not be disallowed u/s 40(a)(ia) of the Act. However, the appellant has objected to such notice issued by the ld. CIT(A) stating that it is barred by limitation as no fresh enquiry could be done by the ld. AO since the ld. CIT(A) powers are co-terminus with that of assessing officer and requested for dropping of such proceeding. The ld. AR f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
