OWENS-CORNING (INDIA) PVT LTD,MUMBAI vs. DCIT 7 (3) (1), MUMBAI

PDF · subscribers
ITA 2996/MUM/2023Status: DisposedITAT Mumbai21 December 2023AY 2012-138 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the appeals for statistical purposes. For ground 1, it directed the AO to decide the issue as per Section 158A of the Act, following the High Court's admission of a similar question of law. For grounds 2 and 3, it restored the matters to the AO to provide consequential benefits based on the pending decision of the CIT(A) for AY 2006-07.

What were the facts?

The assessee appealed against the disallowance of amortization of lease premium and depreciation on fixed assets for assessment years 2011-12 and 2012-13. The assessee also sought set off of brought forward unabsorbed depreciation.

What were the issues?

The primary issues were the allowability of amortization of lease premium and depreciation on fixed assets, and the set off of unabsorbed depreciation, with the Tribunal relying on pending higher forum decisions and statutory provisions for resolution.

Which sections of the Income-tax Act were involved?

Section 158A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Before: SHRI PRASHANT MAHARISHI, AM

For Appellant: Shri Sandeep Balla &, Ms. Kinjal Mehta, ARs
For Respondent: Shri H.M. Bhatt, DR
Hearing: 20.12.2023Pronounced: 21.12.2023
1.

These are the two appeals for A.Y. 2011-12 and 2012-13 filed in and 2996/Mum/2023 for A.Y. 2011-12 and 2012-13 by assessee/ appellant involving identical issue wherein the National Faceless Appeal Centre, Delhi (NFAC) [the learned CIT (A)] passed separate orders both dated 6th July, 2023, are under challenged.

2.

The identical grounds are as under:-

Grounds for A.Y. 2011-12 1.0 Re.: Disallowance of amortization of the premium paid for the leasehold land of Rs. 20,14,928:

1.2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, the said amount amortised is deductible while computing its total income and the action of the Assessing Officer/Commissioner of Income-tax (Appeal) in this respect is erroneous, misconceived and not in accordance with the law.

1.3 The Appellant submits that the Assessing Officer be directed to delete the disallowance so made and to re-compute its total income accordingly.

2.0 Re.: Disallowance of depreciation on additions to the fixed assets made during the Assessment Year 2006-2007 of Rs. 12,70,641:

2.1 The Commissioner of Income-tax (Appeals) has erred in confirming the disallowance of depreciation of Rs. 12,70,641/- out of the total depreciation of Rs. 27,58,477/- claimed by the Appellant during year under consideration on addition to asset made during Assessment Year 2006-07.

2.2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, it is entitled to claim depreciation of Rs. 12,70,641/- and the action of the Assessing Officer/Commissioner of Income-tax (Appeal) in this 2.3 The Appellant submits that the Assessing Officer be directed to allow depreciation as claimed by it and to re-compute its total income accordingly.

3.0 Re: Non granting set off of brought forward unabsorbed depreciation:

3.1 The Commissioner of Income-tax (Appeals) has erroneously missed in providing specific finding on ground of appeal relating to non-granting of set off of brought forward depreciation against the income of the year under consideration.

3.2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject it is entitled to a set off of brought forward unabsorbed depreciation against the income of the year under consideration.

3.3 The Appellant submits that the Assessing Officer be directed to grant set off of brought forward unabsorbed depreciation and re-compute total income for the year under consideration.

Grounds for A.Y. 2012-13 1.0 Re.: Disallowance of amortization of the premium paid for the leasehold land of Rs. 20,14,928:

1.2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, the said amount amortized is deductible while computing its total income and the action of the Assessing Officer/Commissioner of Income-tax (Appeal) in this respect is erroneous, misconceived and not in accordance with the law.

1.3 The Appellant submits that the Assessing Officer be directed to delete the disallowance so made by him and to re-compute its total income accordingly.

2.0 Re.: Disallowance of depreciation on additions to the fixed assets made during the Assessment Year 2006-2007 of Rs. 11,77,621:

2.1 The Commissioner of Income-tax (Appeals) has erred in confirming the disallowance of depreciation of Rs. 11,77,621/- out of the total depreciation of Rs. 24,42,282/- claimed by the Appellant during year under consideration on addition to asset made during Assessment Year 2006-07.

2.2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject, it is entitled to claim depreciation of Rs. 11,77,621/- and the action of the Assessing Officer/Commissioner of Income-tax (Appeal) in this

4.

With respect to the ground no.2, he submits that it is the question of opening written down value of the block of asset to be considered. The original issue arose in case of the assessee for A.Y. 2006-07, which has been restored

5.

Ground no.3 is consequential, it was submitted that as unabsorbed depreciation of 1 year would become the current depreciation of the subsequent year.

6.

The learned Departmental Representative supported the orders of the lower authorities.

7.

We have carefully heard the rival contentions and perused the orders of the lower authorities. We have also considered the order of the Hon'ble High Court in assessee’s own case for A.Y. 2004-05 admitting the issue about allowability of amortized write off the entire amount paid to Maharashtra Industrial Development Corporation in consideration for users of its land for a period of 95 years. Honourable High court admitted this question of law for A.Y. 2004-05. Therefore, the assessee deserves blocking of the appeal. In view of the above accepting, the claim of the assessee directs the learned Assessing Officer to decide the issue as per provisions of Section 158A of the

8.

Coming to ground no.2 of the appeal for both the years, we find that A.Y. 2006-07, is pending before the learned CIT (A) in appeal filed before him on 21 May 2021, for A.Y. 2006-07. The opening Written-down value would be decided on the basis of the decision of the learned CIT (A) as the outcome of the appeal is awaited, therefore, ground no.2 and 3 of the appeal is also restored back to the file of the learned Assessing Officer to give a consequent benefit if available, based on the order of the learned CIT (A). Accordingly, ground no.2 and 3 of the appeal is also allowed with above directions.

9.

In the result, both the appeals of the assessee for both the AY s are allowed for statistical purposes as indicated above.

Order pronounced in the open court on 21.12. 2023.

More judgments on Section 158A

All 116 judgments and leading authorities on Section 158A →

Recent GST High Court judgments

Search GST case law →