THE PRINCIPAL COMMISSIONER OF INCOME TAX 1 vs. M/S AMBAR PROTEIN INDUSTRIES LTD.

Facts

This Tax Appeal was filed by the Revenue against an order of the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench 'A', dated February 4, 2019, for the assessment year 2013-14. The appeal challenges the ITAT's decision to uphold the Commissioner of Income Tax (Appeals) [CIT(A)] order, which deleted an addition of Rs. 5,17,72,276. This addition was made by the Assessing Officer (AO) on account of the disallowance of carry forward of unabsorbed depreciation. The Revenue contended that Circular No. 14 of 2001 clarified that the amendment to the Finance Act was prospective.

Held

The High Court held that the issue raised by the Revenue was no longer res integra. This was in view of the Court's own decision in the case of General Motors Pvt Ltd vs. Deputy CIT [354 ITR 244]. The Court found that the ITAT's decision was in line with established legal precedent. Consequently, the Tax Appeal filed by the Revenue was dismissed. The specific reasoning from the cited precedent, General Motors Pvt Ltd, which likely addressed the prospective or retrospective nature of the Finance Act amendment and its impact on unabsorbed depreciation, formed the basis of this decision. The operative direction was the dismissal of the appeal.

Key Issues

1. Whether the Appellate Tribunal has erred in law and on facts in upholding the decision of the CIT(A) deleting the addition of Rs. 5,17,72,276 made by the Assessing Officer on account of disallowance of carry forward of unabsorbed depreciation, considering that Circular No. 14 of 2001 had clarified that the amendment to the Finance Act was prospective? Assessee's Contentions: The judgment does not record any specific contentions made by the assessee. Revenue's Contentions: The Revenue argued that the ITAT erred in upholding the deletion of the addition made by the AO. The Revenue relied on Circular No. 14 of 2001 to assert that the amendment to the Finance Act concerning the carry forward of unabsorbed depreciation was prospective, implying that the disallowance was justified.