DY. COMMISSIONER OF INCOME TAX, CIRCLE-2(1), HYDERABAD vs. IMERYS CERAMICS INDIA PRIVATE LIMITED, HYDERABAD

The Revenue proposes the following substantive grounds in the instant appeal : “ 1.Whether, on the facts and circumstances of the case, the CIT(A) is correct in law in deleting the addition when the Assessing Officer has correctly reduced the accumulated unabsorbed depreciation from book profit being lesser than the accumulated brought forward loss for arriving at MAT ? 2. Whether, on the facts and circumstances of the case, the CIT(A) is correct in accepting the assessee's computation wherein assessee has considered the depreciation of the A.Ys upto 2006-07, 2007-08 & 2013-14 for which there was profit and no unabsorbed depreciation for three years was available for reduction from book profit ?

Both the learned representatives next invited our attention to the CIT(A)’s detailed discussion qua the impugned section 115JB computation issue as follows :

We have given our thoughtful consideration to Revenue’s pleadings that the Assessing Officer had correctly reduced the accumulated unabsorbed depreciation after considering the corresponding figures in Assessment Years 2008-09 to 2012-13 Rs.96,31,928 thereby making disallowance of Rs.2,99,86,381. We find no merit in the instant argument. This is for the reason that the Assessing Officer herein; while computing the assessee's claim of 115JB MAT, could not be questioned correctness of the brought forward figure from earlier assessment years as held in hon'ble apex court land mark decision in CIT Vs. Manmohan Das (1966) 59 ITR 699 (SC); their lordship held that “ a decision recorded by the ITO to compute the loss in the previous year u/s. 24(3) that the loss cannot be set off against any of the subsequent year is not binding on the assessee”. The very analogy applies in case of the so called Assessing Officer dealing with subsequent years assessment as well wherein he could not go beyond the corresponding carried forward figures on the opening day of the relevant previous year. Coupled with this, the CIT(A) has already taken note of catena of case laws (supra) in assessee's favour and against the department. We therefore conclude that the CIT(A) has rightly reversed the Assessing Officer’s action restricting the assessee’s MAT computation claim in foregoing terms.

This Revenue’s appeal is dismissed.