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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI RAMIT KOCHAR
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals), Salem dated 20.03.2019 and pertains to the assessment year 2012-13.
Shri T.S. Lakshmivenkataraman, the Ld. Representative for the assessee submitted that the only issue is with regard to Rs.1,60,33,728/-. According to the Ld.AR, the assessee claimed depreciation loss of Rs.1,60,33,728/-. However the Assessing Officer allowed only Rs.8,69,323/-. The CIT(A) called for a remand report from the Assessing Officer during the pendency of the appeal before him. The Assessing Officer in the remand report found that the unabsorbed depreciation loss was Rs.16,69,762/- and the business loss was Rs.8,39,25,007/-. The figure pointed out by the Assessing Officer in his remand report is not the correct one. Therefore, the CIT(A) ought to have adopted the figure of Rs.16,69,762/- as against the figure of Rs.8,69,323/- taken by the Assessing Officer. According to the Ld.AR, the Assessing Officer found in the remand report that the accumulated depreciation loss comes to Rs.1,37,00,700/- and the accumulated business loss comes to Rs.12,78,46,221/-. Moreover at Para 8 of the remand report, the Assessing Officer found that the unabsorbed depreciation loss was at Rs.16,69,762/-. According to the Ld.AR, the correct amount of accumulated business loss and accumulated depreciation loss was Rs.7,90,79,408/- and Rs.1,60,33,728/- respectively. The Assessing Officer however observed that there was no business loss for the assessment years 2007-08 and 2008-09. This is apparently an error
Assessing Officer as well as the CIT(A). Referring to the assessment order more particularly Page 4 of the assessment order, the Ld.AR submitted that the assessee in the returned income claimed brought forward depreciation loss and business loss as certified by the chartered accountant. However, the Assessing Officer found that the assessee is not eligible for set-off of the losses as the assessee could not establish the claim of eligible loss claimed against the book profit in the return of income. Referring to page 3 of the assessment order, the Ld.AR submitted that the Assessing Officer found that the assessee can claim only lower of the business loss or depreciation loss in a particular year. Referring to a decision of the Mumbai Bench of this Tribunal in Amline Textiles (P.) Ltd., vs. ITO, [2009] 27 SOT 152, the Ld.AR submitted that Section 72 is not applicable while computation of the book profit. Therefore the Assessing Officer is not correct in observing that the eligible loss is to be applied on year to year basis. This observation according to the Ld.AR is contrary to the decision of the Mumbai Bench of this Tribunal.
On the contrary, Shri A. Sundararajan, the Ld. Departmental Representative submitted that there was confusion in the figures as Ld. Representative for the assessee. Referring to the assessment order, the Ld.DR submitted that the Assessing Officer found that assessee is eligible to claim set-off of depreciation loss of Rs.8,69,323/- only. However the assessee claims that it is eligible for set-off of depreciation loss of Rs.1,60,33,728/-. Therefore it needs to be verified. Hence, the matter may be remitted back to the file of the Assessing Officer for verification.
Having heard the Ld. Representative for the assessee and the Ld.DR, this Tribunal finds that as rightly submitted by the Ld.DR, there was confusion with regard to the figure which is to be set-off while computing book profit U/s.115JB of the Act. The Mumbai Bench of this Tribunal in the case of M/s. Amline Textiles (P.) Ltd., supra, has found that Section 72 of the Act is not applicable. Moreover it was found by the Mumbai Bench of this Tribunal, unabsorbed depreciation or loss brought forward for all the earlier years taken together, was to be reduced for the purpose of computing book profit U/s.115JB of the Act. This decision of the Mumbai Bench of this Tribunal is not brought to the notice of either the Assessing Officer or the CIT(A). In view of this factual situation, this Tribunal is of the considered opinion that the matter needs to be re-examined by the Assessing Officer.
Accordingly the orders of both the authorities below are set aside and the entire issue raised by the assessee is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter and bring on record, the correct amount of depreciation loss and business loss to be set-off while computing book profit U/s.115JB of the Act and thereafter decide the issue afresh in the light of the Mumbai Bench of this Tribunal in Amline Textiles (P.) Ltd., supra. With the above observation, the appeal of the assessee stands allowed for statistical purposes.
In the result, the appeal filed by the assessee stands allowed for statistical purposes.
Order pronounced in the court on 13th January, 2020 at Chennai.