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TMI Blog2023 (4) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... ught about by the Finance Act, 1996 and the subsequent amendment was brought about by the Finance Act 2001. In the light of the said amendments the treatment of unabsorbed depreciation has been different in three different periods [as observed in the case of DCIT vs Time Guaranty Limited (2010) 131 TTJ (Mumbai) (SB) 257] and the pre amendment treatment up to A.Y. 1996-97, Post 1996 amendment treatment for A.Y. 1997-98 to A.Y. 2001-02 and post 2001 amendment, treatment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod depreciation, which was rightly disallowed by then Assessing Officer. Store Purchase of Rs. 6,78,69,000/- Ld. CIT(A) erred in allowing "store purchase" to the extent of Rs. 6,78,69,000/- in Kustore area because the bills/vouchers could not be produced in the course of assessment. In later years, it is found that there was fictitious payment in Kustore area. Keeping in mind the unholy nexus 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 could not produce necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 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 making the enhancement of the disallowance. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 further contended that TDS on such persons were duly deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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