Tolaram International P.Ltd, Mumbai vs Department Of Income Tax

सर्वश्री आय.सी.शभमव, रेखम सदस्म एवुं सश्र ु ी सष ु भम चमर्रम, न्ममयमक सदस्म BEFORE SHRI R.C.SHARMA, AM & MS. SUSHMA CHOWLA, JM आमकय अऩीर सं./ITA No.5342/Mum/2013 ( नििाारण वषा / Assessment Years :2010-11) ITO 8(3)(3), Mumbai Vs. M/s Tolaram International Pvt.

Ltd., B-404, Sagartech Plaza, Sakinaka Junction, Andheri Kurla Road, Mumbai-400072 स्थममी रेखम सं ./ जीआइआय सं ./ PAN/GIR No. : AAACT 6443 K (अऩीरमथी /Appellant) .. (प्रत्मथी / Respondent)

यमजस्र् की ओर से /Revenue by : Shri Neil Philip यनधमवरयती की ओर से /Assessee by : Shri Jitendra Jain

सन ु र्मई की तमयीख / Date of Hearing : 04/06/2015 घोषणम की तमयीख/Date of Pronouncement 04/06/2015

आदे श / O R D E R

PER R.C.SHARMA (A.M):

This is an appeal filed by the revenue against the order CIT(A), for

the assessment year 2010-11, in the matter of order passed u/s.143(3) of

the Income Tax Act, wherein the revenue is aggrieved by the action of

CIT(A) in allowing set off of the unabsorbed depreciation pertaining to the

assessment years prior to assessment year 1996-97 against the income

for A.Y.2010-11 under consideration.

2. At the outset, ld. AR placed on record order of the Tribunal as well

as order of Gujarat High Court wherein exactly similar issue was decided

in favour of the assessee. The precise observation of the Tribunal in the 2 ITA No.5342/13

case of Milton's Pvt. Ltd., ITA No.3019/Mum/2012, order dated 22-5-2012

is as under :-

"3. Vide ground No.2 the assessee contends that consequent to the amendment by the Finance Act, 2001, the assessee is entitled to claim set off of unabsorbed depreciation relating to A.Ys.1995- 96, 1998-99, 2000-01 & 2001-02. In the event of not accepting the aforementioned claim the assessee company contends that brought forward business losses of earlier years ought to have been set off of against the sale of business asset.

4. Similarly in Ground No.4 it contends that learned Commissioner of Income Tax erred in not allowing set off of unabsorbed depreciation against capital gain of A.Y. 2007-08 by overlooking the fact that the assessee became a sick industrial company from A.Y. 2000-01 and hence entitled to set off of unabsorbed depreciation against capital gain of A.Y. 2007-08.

5. At the time of hearing learned counsel submitted that if Ground No. 2 is taken up for consideration the main issue on merit can be considered and, in the event of taking a view in favour of the assessee on the said issue, Ground No. 3&4 would become academic and even Ground No. 1 would become academic and if the Bench is not inclined to accept Ground No. 1 as academic in nature it can even dismiss as not pressed in the event of accepting the plea of the assessee with regard to Ground No. 2. Adverting our attention to the decision of Hon'ble Gujarat High Court in the case of General Motors India Pvt. Ltd. Vs. DCIT (Special Civil Application No. 1773 of 2012 dated 23.8.2012); it was contended that from A.Y. 1997-98 to 2001-02 there was restriction with regard to carry forward of unabsorbed depreciation but the Legislature, in its wisdom, withdrew such restriction by the Finance Act, 2001 wherein the provisions as stood before 1997-98 was restored in which event, the assessee would be entitled to claim set off of unabsorbed depreciation allowance pertaining to A.Y. 1995-96 onwards against income, if any, of the current year. He further submitted that the ITAT Special Bench, Mumbai in the case of DCIT Vs. Times Guranty Ltd. (2010) 131 TTJ 257 (Mum)(SB) was of the opinion that depreciation pertaining to A.Y. 1997-98 to 2001-02 cannot be carried forward beyond 8 years as the law stood at that point of time but subsequent to the aforementioned Judgement Hon'ble Gujarat High Court had taken a view that intention of the Legislature was to allow unabsorbed depreciation allowance for an indefinite period of time since it was for enabling the industry to conserve sufficient funds to replace plant and machinery and, bearing in mind the intention of incentive, restriction of 8 years was dispensed with by an amendment. Subsequent to the decision of Hon'ble Gujarat High Court, ITAT "K" Bench, Mumbai in the case of Hindustan Unilever Ltd. (22 ITR 737) followed the decision of Hon'ble Gujarat High Court in preference to the decision of the Special Bench; since 3 ITA No.5342/13

there is no contrary decision of any other High Court. Learned counsel for the assessee submitted that the Assessing Officer in proceedings u/s. 143(3) of the Act had originally accepted the claim of set off of carried forward unabsorbed depreciation which is in consonance with the view taken by Hon'ble Gujarat High Court and, hence view taken by the Assessing Officer cannot be said to be erroneous. At any rate, in the, light of later decision of the ITAT, Mumbai Bench, Ground No. 2 deserves to be decided in favour of the assessee on merit".

3. As the facts and circumstances during the year under consideration

are same, respectfully following the order of the Tribunal as well as order

of the Hon'ble Gujarat High Court discussed in the said order, we confirm

the action of the CIT(A) for allowing set off of unabsorbed depreciation

pertaining to assessment years prior to A.Y.1996-97 against the income

for current assessment year 2010-2011.

4. In the result, appeal of the Revenue is dismissed.

Order pronounced in the open court on this 04/06/2015.

Sd/- Sd/- (सष ु भम चमर्रम) (आय.सी.शभमव) (SUSHMA CHOWLA) (R.C.SHARMA) न्यानयक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER भुंफई Mumbai; ददनमंक Dated 04/06/2015 प्र.कु.मभ/pkm, यन.स/ PS

आदे श की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to :

1. अऩीरमथी / The Appellant

2. प्रत्मथी / The Respondent.

3. आमकय आमुक्त(अऩीर) / The CIT(A), Mumbai.

4. आमकय आमुक्त / CIT

5. वर्बमगीम प्रयतयनधध, आमकय अऩीरीम अधधकयण, भंफ ु ई / DR, ITAT, Mumbai

6. गमर्व पमईर / Guard file.

आदे शािसार/ BY ORDER, सत्ममवऩत प्रयत //True Copy/

उप/सहायक पुंजीकार (Asstt. Registrar) आयकर अपीऱीय अधिकरण, भुंफई / ITAT, Mumbai