DCIT CIRCLE-16(1), MUMBAI vs. M/S. DIGICABLE NETWORK(INDIA) LTD., MUMBAI

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ITA 1140/MUM/2023Status: DisposedITAT Mumbai31 July 2023AY 2012-133 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeal in limine due to the ongoing insolvency proceedings. The Revenue was granted liberty to file an application for recall after the approval of the resolution plan.

What were the facts?

The Revenue filed an appeal against an order allowing the set-off of unabsorbed depreciation against an addition made under Section 68. The assessee company was undergoing Corporate Insolvency Resolution Process under the IBC code.

What were the issues?

Whether unabsorbed depreciation can be set off against an addition made under Section 68, and the impact of insolvency proceedings on the appeal.

Which sections of the Income-tax Act were involved?

Section 68

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Income Tax Appellate Tribunal, ‘D‘ BENCH

For Respondent: Smt. Riddhi Mishra
Hearing: 20/07/2023Pronounced: 31/07/2023

आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeal has been filed by the Revenue against order dated 07/02/2023 passed by NFAC Delhi for the quantum of assessment passed u/s.144 for the A.Y.2012-13.

2.

In the grounds of appeal, Revenue has raised the following grounds:-

M/s. Digicable Network (India) Ltd.

1.

“Whether on the facts and in the circumstances of the case, the LD CIT(A) erred in directing the assessing officer to allow the set- off of unabsorbed depreciation against the addition made u/s 68 of the Act despite therein judicial prudent established in the case of Commissioner of Income Tax Trichur Vs Kerala Sponge Iron Ltd((2017) 79 taxmann.com 350 (Kerala)) held that the income has been treated as unexplained cash credit under section 68 of the Act. Once it is so done for the purpose of set off or any other purpose, the said unexplained income cannot be treated as business income under any one of the head provided under section 14 in which the question of set off does not arise."

3.

At the outset, ld. DR submitted that here in this case the assessee company has gone into Insolvency process under IBC code and it is under Corporate Insolvency Resolution process. Department has already filed proof of claim in respect of income tax dues. NCLT has reserved the order on 02/01/2023 regarding the approval of resolution plan. Accordingly, in view of the aforesaid fact that already assessee company is under Insolvency Resolution Process and department has to get clearance from the Resolution Board and approval of the Resolution plan therefore, appeal of the Revenue is dismissed in limnie till it is allowed. However, department would be at liberty to file application for recall of the order after the approval of the Resolution plan and furnishing of the proof of claim in respect of income tax dues. Accordingly, the appeal of the Revenue is dismissed in liminie.

M/s. Digicable Network (India) Ltd.

4.

In the result, appeal of the Revenue is dismissed in limnie. Order pronounced on 31st July, 2023.

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