THE DCIT, CIRCLE-2(1)(1), AHMEDABAD vs. M/S. GUJARAT LEASE FINANCE LTD., AHMEDABAD

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ITA 52/AHD/2017Status: DisposedITAT Ahmedabad26 April 2019AY 2009-103 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal, following the Gujarat High Court judgment in General Motors India (P.) Ltd. vs. DCIT, held that unabsorbed depreciation can be carried forward and set off without any time limit as per Section 32(2) of the Income Tax Act, as amended. Therefore, the disallowance made by the AO was incorrect.

What were the facts?

The Assessing Officer (AO) disallowed the carry forward of unabsorbed depreciation from assessment years 2000-01 and 2001-02 to assessment year 2009-10, totaling Rs. 56,87,67,226. The assessee argued that unabsorbed depreciation could be carried forward indefinitely.

What were the issues?

The primary issue was whether unabsorbed depreciation could be carried forward and set off beyond the eight-year limit, considering amendments to Section 32(2) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 32(2)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, AHMEDABAD “C” BENCH

Before: SHRI PRADIP KUMAR KEDIA & SHRI MAHAVIR PRASAD

For Appellant: Shri M.S.A. Khan, CIT/DR

PER MAHAVIR PRASAD, JUDICIAL MEMBER

1.

This appeal filed by the Revenue is directed against the order of the Ld. CIT(A)-2, Ahmedabad dated 03.10.2016 pertaining to A.Y. 2009-10 and following grounds have been taken:

ITA No. 52/Ahd/2017 2 . A.Y. 2009-10 1. The Ld.CIT(A) has erred in law and on facts in deleting the disallowance made by the AO on account of carried forward ' unabsorbed depreciation of Rs.38,76,64,533/- of Asst.Year 2000-01 and Rs.18,11,02,693/- of Asst. Year 2001- 02 aggregating to Rs.56,87,67,226/- in Asst. Year 2009-10 without properly appreciating the facts of the case and the material brought on record. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. 3. It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of the Assessing Officer may be restored to the above extent. 4. The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary.

2.

The facts of the case are that it was noticed that the assessee had wrongly claimed carry forward of losses of earlier years. Verification of computation of income for the assessment year 2008-09 revealed that the assessee had wrongly carried forward unabsorbed depreciation of Rs. 387664533/- for the assessment year 2000-01 to the present assessment year 2009-10. Similarly, the assessee had wrongly carried forward unabsorbed depreciation of Rs. 181102693/- for the assessment year 2001-02 to the present year 2009-10 and assessee can carry forward unabsorbed depreciation up to 8 years from the assessment year of unabsorbed depreciation and made addition of Rs. 568767226/- in assessment year 2009-10.

3.

Thereafter, assessee preferred first statutory appeal before the ld. CIT(A) who partly allowed the appeal of the assessee.

4.

We have gone through the relevant record and impugned order. At the outset, ld. A.R. cited a judgment of Hon’ble Gujarat High Court in the case of General Motors India (P.) Ltd. vs. DCIT [2012] 25 taxmann.com 364 wherein it is held that unabsorbed depreciation could be carried forward and set off even after a period of eight years without any limit whatsoever in accordance

ITA No. 52/Ahd/2017 3 . A.Y. 2009-10 with Section 32(2) as amended by Finance Act, 2001 and granted relief to the assessee. Therefore, respectfully following the above said judgment, we dismiss this ground of appeal of the revenue.

5.

In the result, appeal filed by the Revenue is dismissed.

Order pronounced in Open Court on 26 - 04- 2019

Sd/- Sd/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad: Dated 26/04/2019 Rajesh Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) – 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad. 6. Guard File. By ORDER

Deputy/Asstt.Registrar ITAT,Ahmedabad

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