DCIT - 1(1)(1), MUMBAI vs. M/S AMIT SPINNING INDUSTRES LTD., MUMBAI

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ITA 4343/MUM/2018Status: DisposedITAT Mumbai11 December 2019AY 2009-104 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 followed the Gujarat High Court's decision in General Motors India Pvt. Ltd., holding that unabsorbed depreciation prior to AY 2001-02 is eligible for carry forward and set off beyond 8 years without a time limit, as per Section 32(2) amended by the Finance Act 2001.

What were the facts?

The Assessing Officer disallowed carry forward of unabsorbed depreciation for AY 1995-96 and 1997-98 beyond AY 2004-05, relying on a Special Bench decision. The assessee claimed it was eligible for carry forward beyond 8 assessment years.

What were the issues?

Whether unabsorbed depreciation from assessment years prior to AY 2001-02 can be carried forward and set off beyond the 8-year limit.

Which sections of the Income-tax Act were involved?

Section 32(2)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, “A”, BENCH

Before: SHRI MAHAVIR SINGH, JM & SHRI M.BALAGANESH, AM

For Respondent: Shri S. Michael Jerald
Hearing: 09/12/2019Pronounced: 11/12/2019

आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in A.Y.2009-10 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-6, Mumbai in appeal No.CIT(A)-6/IT/90/2016-17 dated 04/04/2018 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 08/12/2011 by the ld. Asst. Commissioner Of Income Tax-1(1), Mumbai (hereinafter referred to as ld. AO).

2.

The revenue raised the following ground of appeal:-

M/s. Amit Spinning Industries Ltd.

1.

"Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) was right in allowing the appeal of the assessee by holding that the assessee is entitled to carry forward unabsorbed depreciation for the A.Y. 1995-96 to 1997-98 beyond 8 assessment years, without taking into account the amendment brought in by the finance act (No. 2) of 1996 to sec. 32(2) of the I.T, Act, 1961?"

3.

None appeared on behalf of the assessee. Since the matter has already been covered, we proceed to dispose off this appeal on hearing the ld. DR. 3.1. We find that assessee company is a spinning unit and is engaged in manufacturing of combed and carded cotton yarn. The assessee company filed its return of income for the A.Y.2009-10 on 26/09/2009 declaring total loss of Rs.9,93,43,173/-. While completing the assessment, the ld. AO disallowed a sum of Rs.12,22,25,704/- on account of carry forward of unabsorbed depreciation pertaining to A.Yrs 1995-96 and 1997-98, while making other additions. We find that the ld. AO noticed from Form 3CD furnished by the assessee that unabsorbed depreciation being carried forward till A.Y.2009-10 was Rs.50,76,21,352/-. The assessee furnished the year wise break-up of unabsorbed depreciation carried forward. The ld. AO on going through the details, noticed that an amount of Rs.7,50,12,769/- pertained to A.Y.1995-96 and Rs.4,72,12,935/- pertained to A.Y.1996-97. The ld. AO by placing reliance on the decision of Special Bench of Mumbai Tribunal in the case of DCIT vs. Times Guaranty Ltd. reported in 40 SOT 14 held that the unabsorbed depreciation pertaining to A.Yrs 1995-96, 1996-97 could be set off only up to 2004-05 and not thereafter. Accordingly, he concluded that assessee cannot be allowed to carry forward the unabsorbed depreciation amounting to Rs.12,22,25,704/- pertaining to A.Yrs1995-96 and 1997-98 beyond A.Y.2004-05. The ld. CIT(A) by placing reliance on the decision of Hon’ble Gujarat High Court in the case of General Motors India Pvt. Ltd.

M/s. Amit Spinning Industries Ltd. vs. DCIT reported in 257 CTR 123 wherein the similar issue had come up for adjudication, granted relief to the assessee. We find that the Hon’ble Gujarat High Court had adjudicated the very same issue in dispute before us and ultimately concluded that unabsorbed depreciation of earlier years prior to A.Y.2001-02 would be eligible to be carried forward and set off after a period of 8 years without any time limit whatsoever in accordance with Section 32(2) of the Act as amended by the Finance Act 2001. Respectfully following the aforesaid Gujarat High Court decision, we do not find any infirmity in the order of the ld. CIT(A) granting relief to the assessee.

4.

In the result, appeal of the revenue is dismissed.

Order pronounced in the open court on this 11/12/2019

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