ITO, WARD-1(1)(1), AHMEDABAD vs. M/S. AMBAR PROTEIN INDUSTRIES LTD., AHMEDABAD

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ITA 742/AHD/2017Status: DisposedITAT Ahmedabad04 February 2019AY 2013-143 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 held that the CIT(A)'s view was in line with the jurisdictional High Court's decision in General Motors Ltd. vs. DCIT. Therefore, the Revenue's appeal lacked merit.

What were the facts?

The assessee claimed carry forward of unabsorbed depreciation and business loss. The AO restricted this claim, believing unabsorbed depreciation could only be carried forward for eight years after an amendment to Section 32(2). The CIT(A) disagreed, holding that unabsorbed depreciation from prior to AY 2002-03 merged with the depreciation of AY 2002-03 and could be carried forward indefinitely.

What were the issues?

Whether unabsorbed depreciation prior to AY 2002-03 can be carried forward indefinitely after the amendment 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, “A” BENCH, AHMEDABAD

Before: SHRI RAJPAL YADAV & SHRI AMARJIT SINGH

Hearing: 31/01/2019Pronounced: 4/02/2019

आदेश/O R D E R

PER RAJPAL YADAV, JUDICIAL MEMBER: Revenue is in appeal before the Tribunal against order of the ld.CIT(A)-12, Ahmedabad dated 28.12.2016 passed for the Asstt.Year 2013- 14.

2.

Revenue has pleaded that the ld.CIT(A) has erred in law and on facts in deleting the addition of Rs.5,17,72,276/- which was added by the AO on account of disallowance of carry forward unabsorbed depreciation.

ITA No.742/Ahd/2017 2 3. Brief facts of the case are that the assessee has filed its return of income on 1.10.2013 declaring total loss of Rs.38,22,594/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee. The ld.AO has directed the assessee to furnish details of brought forward business loss and unabsorbed depreciation. In response to the query of the AO, the assessee has compiled details in tabular form and submitted to the AO starting from the Asstt.Year 1996-97. Such details have been reproduced by the AO at page no.8 and 9 of the assessment order. The AO thereafter has observed that after amendment effected in section 32(2) of the Income Tax Act, 1961 w.e.f. 1.4.2002, the carry forward unabsorbed depreciation could not be computed after expiry of eight years. Hence, he restricted carry forward unabsorbed depreciation and business loss to Rs.75,05,867/- as against the claim made by the assessee. On appeal, the ld.CIT(A) did not concur with the view taken by the AO. He observed that from the Asstt.Year 2002-03 by virtue of amendment in section 32(2), the depreciation on earlier year would become part of the current year, and thereafter it will survive perennially on account of merger with the depreciation for the Asstt.Year 2002-03. In other words, unabsorbed depreciation prior to the Asstt.Year 2002-03 would become depreciation of the Asstt.Year 2002-03, and thereafter it will be available to assessee endlessly upto and until it is utilized. In this way, the ld.CIT(A) has directed the AO to recompute the set off and carry forward of unabsorbed depreciation accordingly.

4.

In response to the notice of hearing, no one has come present on behalf of the assessee. With the assistance of the ld.DR, we have gone through the record. We find that view taken by the ld.CIT(A) is in line with the decision of Hon’ble jurisdictional High Court in the case of General Motors Ltd. Vs. DCIT, 354 ITR 244 (Guj). Hon’ble High Court has decided this appeal on 7th

ITA No.742/Ahd/2017 3 April, 2015. Putting reliance upon the decisions of the Hon’ble jurisdictional High Court, we do not find any merit in this appeal of the Revenue. It is dismissed.

5.

In the result, appeal of the Revenue is dismissed. Order pronounced in the Court on 4th February, 2019 at Ahmedabad.

Sd/- Sd/- (AMARJIT SINGH) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 04/02/2019

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