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

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.

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.