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Income Tax Appellate Tribunal, MUMBAI BENCHES, ‘G’ MUMBAI
Before: Shri Joginder Singh, & Shri Manoj Kumar Aggarwal
आदेश / O R D E R
Per Joginder Singh(Judicial Member) These two appeals are by the assessee against the impugned orders both dated 15/09/2014 of the Ld. First Appellate Authority, Mumbai.
During hearing, of both these appeals, the ld. counsel for the assessee, Shri Nishit Khatri, contended that the Tribunal deleted the quantum addition for the impugned Assessment Year, therefore, the penalty imposed u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter the Act) will not survive. The ld. counsel furnished the copy of the order dated 26/06/2015 (ITA No.7492/Mum/2011) for Assessment Year 2005-06 and ITA No.3947/Mum/2012 for Assessment Year 2008-09 (consolidated order). This factual assertion was not controverted by Miss Anupama Singla, ld. DR.
2.1. We have considered the rival submissions and perused the material available on record. In view of the above, we are reproducing hereunder the relevant portion of the order on quantum addition dated 26/06/2015 for ready reference and analysis:-
“Out of these two appeals, one appeal filed by the assessee is against the order of CIT(A)-40, Mumbai, dated 24.08.2011 relating to assessment year 2005-06 against the order passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961. The assessee also filed another appeal against the order of CIT(A)-40,
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Mumbai, dated 12.03.2012 relating to assessment year 2008-09 against order passed under section 143(3) of the Income Tax Act, 1961.
Both the appeals relating to the same assessees were heard together and are being disposed of by this consolidated order for the sake of convenience.
In ITA No.7492/M/2011, the assessee has raised the following grounds of appeal:- 1. The learned Commissioner of Income-tax (Appeals) erred in upholding the action of the learned Assistant Commissioner of Income-tax (hereinafter referred to as "the Assessing Officer") in reopening the assessment under section 148. The appellant submits that the order passed under section 143(3) r.w.s. 147 of the Act is illegal, null and void and bad in law as the appellant has filed full, correct and complete particulars of its income during the course of original assessment proceedings. The appellant submits that the reopening is illegal and contrary to provisions of the Act as the appellant has not concealed the particulars of its income nor filed any inaccurate particulars thereof.
The learned Commissioner of Income-tax (Appeals) erred in upholding the action of the Assessing Officer not allowing the set off of brought forward unabsorbed depreciation amounting to Rs.16,828,559/- pertaining to assessment year 1996-1997 against the business 'income for assessment year 2005-2006.
The appellant submits that the Assessing Officer be directed:
(a) To allow the set-off of brought forward unabsorbed depreciation amounting to Rs.16,828,559/-, pertaining to assessment year 1996-1997 and to modify the assessment in accordance with the provisions of the Act and also to give all consequential relief.
Each of the above grounds of appeal are independent and without prejudice to each other.
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In ITA No.3947/M/2012, the assessee has raised the
following grounds of appeal:-
1) (a) The learned Commissioner of Income-tax (Appeals) erred in upholding the action of the Assistant Commissioner of Income-tax (hereinafter referred to as "the Assessing Officer") in not allowing the set-off of brought forward unabsorbed depreciation aggregating to Rs.7,23,04,034/- (in respect of assessment years 1994-95 to 1998-99) of the amalgamating company, SPL Polymers Ltd against the profits of the appellant company pursuant to a scheme of amalgamation between SPL Polymers Ltd and the appellant in the assessment year under appeal. (b) The appellant submits that pursuant to amalgamation and in accordance with the provisions of section 72A, it is eligible to set off brought forward unabsorbed depreciation and business losses of the amalgamating company and the Assessing officer ought to have allowed the set off of brought forward unabsorbed depreciation while computing the income. (c) Without prejudice to what has been stated above, the appellant submits that as per provisions of section 72A, where there is an amalgamation between two companies, the accumulated loss and the unabsorbed depreciation of the amalgamating company shall deemed to be loss or unabsorbed depreciation of the amalgamated company for the previous year in which amalgamation was affected. The appellant submits that the amalgamation was affected in the assessment year under appeal and hence the set off of brought forward unabsorbed depreciation ought to be allowed by the Assessing Officer. 2. The learned Commissioner of Income-tax (Appeals) erred in not directing the Assessing Officer to exclude interest on loan (taken for the purpose of business) while calculating disallowance under section 14A. 3) The appellant submits that Assessing Officer be directed:- (a) to allow set-off of unabsorbed brought forward depreciation in respect of assessment years 1994-95 to 1998-99 aggregating to Rs.7,23,04,034/-of the amalgamating company SPL Polymers Ltd.; (b) to exclude interest on loan (taken for the purpose of business) while calculating disallowance under section 14A. 4. Each of the above grounds of appeal are independent and without prejudice to each other. 5. First, we shall take up the appeal in ITA No.3947/Mum/2012 filed by the assessee relating to assessment year 2008-09.
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The issue raised by the assessee vide ground of appeal No.1 is against the non-allowance of set off of brought forward unabsorbed depreciation aggregating to Rs.7,23,04,034/- in respect of assessment years 1994-95 to 1998-99 of the amalgamated company i.e. SPL Polymers Ltd., against the profits of the assessee company, pursuant to the scheme of amalgamation between the two.
Briefly, in the facts of the present case, the assessee was engaged in the manufacture and sale of polystyrene which has application in consumer durables, household articles, stationery and other sectors of industry. During the year under consideration, pursuant to scheme of amalgamation between the assessee and its subsidiary company i.e. SPL Polymers Ltd., approved by the relevant Hon’ble High Courts vide orders dated 06.06.2008 and dated 16.06.2008, the business and all assets & liabilities of the erstwhile SPL Polymers Ltd. were transferred to and vested with the assessee company w.e.f. 01.07.2007 i.e. the appointed date. The assessee had claimed the set off of business loss and unabsorbed losses of SPL Polymers Ltd. against its profits, since the said company was taken over by the assessee. The statement giving details of business losses and unabsorbed depreciation to be carried forward and set off in subsequent years are tabulated at pages 2 and 3 of the assessment order. The Assessing Officer noted that the assessee had claimed set off of brought forward losses and unabsorbed depreciation of the amalgamated company SPL Polymers Ltd. pertaining to assessment years 1994-95 to 1998-99 and other assessment years. The assessee was show caused as to why the unabsorbed depreciation pertaining to assessment years 1994-95 to 1998-99 of SPL Polymers Ltd. aggregating to Rs.7,23,04,034/- could be set off in assessment year 2008-09, in the light of provisions of section 32(2) of the Act, which were applicable at the relevant time. In reply, the assessee submitted that the said set off is allowable to the assessee in view of the provisions of section 72A of the Act, where the assessee was engaged in the same line of business and it also continues to hold 3/4th of the book value of fixed assets held by it, two years prior to the date of amalgamation. The Assessing Officer observed that the amalgamation order provided the terms and conditions of amalgamation, but the carry forward and set off of brought forward losses and unabsorbed depreciation would be governed by respective provisions of the Act. The
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Assessing Officer was of the view that the unabsorbed depreciation of the amalgamating company pertaining to assessment years 1994-95 to 1998-99 shall not be deemed to be the unabsorbed depreciation of the amalgamated company, since the unabsorbed depreciation losses of the above mentioned assessment years could not be carried forward and set off beyond 8 years as per the provisions of section 32(2) of the Act, applicable to the relevant assessment years, when the losses were determined. Referring to the provisions of section 32(2) of the Act as substituted by the Finance (No.2) Act, 1996 w.e.f. 01.04.1997 and also referring to the substitution of sub-section (2) of section 32 by the Finance Act, 2001 w.e.f. 01.04.2002, the Assessing Officer held that the brought forward unabsorbed depreciation losses of the amalgamating company pertaining to assessment years 1994-95 to 1998-99 aggregating to Rs.7,23,04,034/- shall not be allowed to the assessee i.e. amalgamated company. Reliance in this regard was placed on the decision of Special Bench of Mumbai Tribunal in M/s. Times Guaranty Ltd. in ITA Nos.4917 & 4918/Mum/2008, order dated 30.06.2010.
The CIT(A) upheld the order of Assessing Officer, against which the assessee is in appeal.
The learned Authorized Representative for the assessee after taking us through the factual aspects of the case, pointed out that the unabsorbed depreciation relating to assessment years 2000- 01 to 2006-07 was allowed to be set off. However, the dispute was in respect of the unabsorbed depreciation losses relating to assessment years 1994-95 to 1998-99, which as per the authorities below could be forwarded only for 8 years. The learned Authorized Representative for the assessee pointed out that after the amendment in section 32(2) of the Act, which was substituted by the Finance Act, 2001 w.e.f. 01.04.2002, there was no limitation of 8 years for setting off of unabsorbed depreciation. It was fairly pointed out by the learned Authorized Representative for the assessee that after the amendment by the Finance Act, 1996 w.e.f. 01.04.1997, there was a limitation which was in force till 01.04.2001. Thereafter, since the section was amended and the balance unabsorbed losses could be set off against the income of the later years. Reliance in this regard was placed on the ratio laid down by the Mumbai Bench of Tribunal in Hindustan
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Unilever Ltd. Vs. ACIT in ITA No.7868/Mum/2010, relating to assessment year 2006-07, order dated 10.12.2012. It was further pointed out by the learned Authorized Representative for the assessee that similar issue arose before the Hon’ble Gujarat High Court in General Motors India Pvt. Ltd. Vs. DCIT in Special Civil Application No.1773 of 2012, wherein vide judgment dated 23.08.2012, it was held that any unabsorbed depreciation available to the assessee on first day of April, 2002 i.e. assessment year 2002-03, would be dealt with in accordance with the provisions of section 32(2) of the Act as amended by the Finance Act, 2001 and once the Circular No.14 of 2001 clarified that the restriction of 8 years of carry forward and set off of unabsorbed depreciation has been dispenses with, the unabsorbed depreciation from assessment year 1997-98 up to 2001-02 would be carried forward to assessment year 2002-03 and become part thereof. The learned Authorized Representative for the assessee further pointed out that the SLP against the said decision of Hon’ble Gujarat High Court has been dismissed by the Hon’ble Supreme Court vide judgment dated 11.03.2013 reported in 354 ITR (Statute) 104.
The learned Departmental Representative for the Revenue on the other hand, placed reliance on the orders of authorities below.
We have heard the rival contentions and perused the record. The assessee during the year under consideration, pursuant to the scheme of amalgamation between the assessee and its subsidiary company SPL Polymers Ltd., the business and all assets & liabilities of the erstwhile SPL Polymers Ltd. were transferred to and vested with the assessee company w.e.f. 01.07.2007. The claim of the assessee was that the business losses and unabsorbed depreciation losses of SPL Polymers Ltd. were to be set off against the profits of the assessee as the said company was taken over by the assessee. The Assessing Officer at pages 1 and 2 of assessment order has tabulated the details of business losses and unabsorbed depreciation to be carried forward for set off in the subsequent years. The perusal of the tabulated details reflects that vis-à-vis unabsorbed depreciation of SPL Polymers Ltd., the same related to assessment years 1994-95 to 1998-99 and thereafter to 2000-01 and 2001-02 and further from
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assessment years 2004-05 to 2006-07. The unabsorbed depreciation relating to assessment years 2000-01 to 2006-07 have admittedly been allowed to be carried forward and set off against the profits of business of the assessee company. However, both the authorities below have denied the benefit of set off of carry forward of unabsorbed depreciation relating to assessment years 1994-95 to 1998-99, in view of the pre- amended provisions of section 32(2) of the Act. As per the Finance (No.2) Act, 1996 which was applicable w.e.f. 01.04.1997, the carry forward of the unabsorbed depreciation was to be allowed for a period of 8 assessment years. However, the said sub-section was further amended by the Finance Act, 2001 w.e.f. 01.04.2002, under which the restriction of 8 years has been removed and it is provided that the depreciation allowance or part of the allowance, to which effect had not been given, shall be added to the amount of allowance for depreciation for the following previous years and would be deemed to be part of that year and hence so on to succeeding previous years.
The issue arising before us is whether the said amendment to section 32(2) of the Act is a substantive provision or a procedural one. The claim of the assessee was rejected by the authorities below, in turn relying on the ratio laid down by the Special Bench of Mumbai Tribunal in DCIT Vs. Times Guarantee Ltd. (supra) on the interpretation of provisions of section 32(2) of the Act and the carry forward and set off of unabsorbed depreciation relating to assessment years 1994-95 to 1998-99 was not allowed to the assessee.
The Hon’ble Gujarat High Court in General Motors India Pvt. Ltd. Vs. DCIT (2013) 354 ITR 244 (Guj) vide judgment dated 23.08.2012 had elaborated upon the issue of claim of unabsorbed depreciation and the law applicable and also the effect of amendment to section 32(2) of the Act by the Finance Act, 2001 and it was held that the amendment made to section 32(2) of the Act by the Finance Act, 2001 was applicable from assessment year 2002-03 and subsequent years. It was further held that any unabsorbed depreciation available to the assessee on the first day of April, 2002 would be dealt in accordance with the provisions of section 32(2) of the Act as amended by the Finance Act, 2001 and not by the provisions of section 32(2) of the Act as it stood before
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the said amendment. It was further held by the Hon’ble Gujarat High Court that had the intention of the Legislature been to allow the unabsorbed depredation allowance worked out in the assessment year 1997-98 only for eight subsequent assessment years even after the amendment of section 32(2) by the Finance Act, 2001, it would have incorporated a provision to that effect.
The Hon’ble Gujarat High Court had considered the issue at length and had observed as under:-
“30. The last question which arises for consideration is that whether the unabsorbed depreciation pertaining to the assessment year 1997-98 could be allowed to be carried forward and set off after a period of eight years or it would be governed by section 32 as amended by the Finance Act, 2001 ? The reason given by the Assessing Officer under section 147 is that section 32(2) of the Act was amended by the Finance (No. 2) Act of 1996, with effect from the assessment year 1997-98 and the unabsorbed depreciation for the assessment year 1997-98 could be carried forward up to the maximum period of eight years from the year in which it was first computed. According to the Assessing Officer, eight years expired in the assessment year 2005-06 and only till then, the assessee was eligible to claim unabsorbed depreciation of the assessment year 1997-98 for being carried forward and set off against the income for the assessment year 2005-06. But the assessee was not entitled for unabsorbed depreciation of Rs.43,60,22,158 for the assessment year 1997-98, which was not eligible for being carried forward and set off against the income for the assessment year 2006-07.
Prior to the Finance (No. 2) Act of 1996 the unabsorbed depreciation for any year was allowed to be carry forward indefinitely and by a deeming fiction became allowance of the immediately succeeding year. The Finance (No. 2) Act of 1996 restricted the carry forward of unabsorbed depreciation and set-off to a limit of eight years, from the assessment year 1997-98. Circular No. 762, dated February 18, 1998 (see [1998] 230 ITR (St.) 12), issued by the Central Board of Direct Taxes (CBDT) in the form of Explanatory Notes categorically provided, that the unabsorbed depreciation allowance for any previous year to which full effect cannot be given in that previous year shall be carried forward and added to the depreciation allowance of the next year and be deemed to be part thereof.
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So, the unabsorbed depreciation allowance of the assessment year 1996-97 would be added to the allowance of the assessment year 1997-98 and the limitation of eight years for the carry forward and set off of such unabsorbed depreciation would start from the assessment year 1997-98.
We may now examine the provisions of section 32(2) of the Act before its amendment by the Finance Act, 2001. The section, prior to its amendment by the Finance Act, 2001, read as under :
"Where in the assessment of the assessee full effect cannot be given to any allowance under clause (ii) of sub-section (1) in any previous year owning to there being no profits or gains chargeable for that previous year or owing to the profits or gains being less than the allowance, then, the allowance or the part of allowance to which effect has not been given (hereinafter referred to as unabsorbed depreciation allowance), as the case may be,—
(i) shall be set off against the profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year ;
(ii) if the unabsorbed depreciation allowance cannot be wholly set off under clause (i), the amount not so set off shall be set off from the income under any other head, if any, assessable for that assessment year;
(iii) if the unabsorbed depreciation allowance cannot be wholly set off under clause (i) and clause (ii), the amount of allowance not so set off shall be carried forward to the following assessment year, and—
(a) it shall be set off against the profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year ;
(b) if the unabsorbed depreciation allowance cannot be wholly so setoff, the amount of unabsorbed depreciation allowance not so set off shall be carried forward to the following assessment year not being more than eight assessment years immediately succeeding the assessment year for which the aforesaid allowance was first computed:
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Provided that the time limit of eight assessment years specified in sub-clause (b) shall not apply in case of a company for the assessment year beginning with the assessment year relevant to the previous year in which the said company has become a sick industrial company under sub-section (1) of section 17 of the Sick Industrial Company (Special Provisions) Act, 1985 (1 of 1986), and ending with the assessment year relevant to the previous year in which the entire net worth of such company becomes equal to or exceeds the accumulated losses.
Explanation.—For the purposes of this clause, 'net worth' shall have the meaning assigned to it in clause (ga) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985."
The aforesaid provision was introduced by the Finance (No.2) Act, 1996, and further amended by the Finance Act, 2000. The provision introduced by the Finance (No. 2) Act was clarified by the Finance Minister to be applicable with prospective effect.
Section 32(2) of the Act was amended by the Finance Act, 2001, and the provision so amended reads as under :
"Where, in the assessment of the assessee, full effect cannot be given to any allowance under sub-section (1) in any previous year, owing to there being no profits or gains chargeable for that previous year, or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of sub- section (2) of section 72 and sub-section (3) of section 73, the allowance or the part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following previous year and deemed to be part of that allowance, or if there is no such allowance for that previous year, be deemed to be the allowance of that previous year, and so on for the succeeding previous years."
The purpose of this amendment has been clarified by the Central Board of Direct Taxes in Circular No. 14 of 2001 (see [2001] 252 ITR (St.) 65, 90). The relevant portion of the said Circular reads as under :
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"Modification of provisions relating to depreciation
30.1 Cinder the existing provisions of section 32 of the Income-tax Act, carry forward and set off of unabsorbed depreciation is allowed for eight assessment years.
30.2 With a view to enable the industry to conserve sufficient funds to replace plant and machinery, specially in an era where obsolescence takes place so often, the Act has dispensed with the restriction of eight years for carry forward and set off of unabsorbed depreciation. The Act has also clarified that in computing the profits and gains of business or profession for any previous year, deduction of depredation under section 32 shall be mandatory.
30.3 Under the existing provisions, no deduction for depreciation is allowed on any motor car manufactured outside India unless it is used (i) in the business of running it on hire for tourists, or (ii) outside in the assessee's business or profession in another country.
30.4 The Act has allowed depreciation allowance on all imported motor cars acquired on or after 1st April, 2001.
30.5 These amendments will take effect from the 1st April, 2002, and will, accordingly, apply in relation to the assessment year 2002-03 and subsequent years."
The Central Board of Direct Taxes Circular clarifies the intent of the amendment that it is for enabling the industry to conserve sufficient funds to replace plant and machinery and accordingly the amendment dispenses with the restriction of eight years for carry forward and set off of unabsorbed depreciation. The amendment is applicable from the assessment year 2002-03 and subsequent years. This means that any unabsorbed depreciation available to an assessee on the 1st day of April, 2002 (the assessment year 2002-03), will be dealt with in accordance with the provisions of section 32(2) as amended by the Finance Act, 2001, and not by the provisions of section 32(2) as it stood before the said amendment. Had the intention of the Legislature been to allow the unabsorbed depredation; allowance worked out in the assessment year 1997-98 only for eight subsequent assessment years even after the amendment of section 32(2) by the Finance Act, 2001, it would have incorporated a provision to that effect.
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However, it does not contain any such provision. Hence, keeping in view the purpose of the amendment of section 32(2) of the Act, a purposive and harmonious interpretation has to be taken. While construing the taxing statutes, rule of strict interpretation has to be applied, giving fair and reasonable construction to the language of the section without leaning to the side of the assessee or the Revenue. But if the Legislature fails to express clearly and the assessee becomes entitled for a benefit within the ambit of the section by the clear words used in the section, the benefit accruing to the assessee cannot be denied. However, Circular No. 14 of 2001 had clarified that under section 32(2), in computing the profits and gains of business or profession for any previous year, deduction of depreciation under section 32 shall be mandatory. Therefore, the provisions of section 32(2) as amended by the Finance Act, 2001, would allow the unabsorbed depreciation allowance available in the assessment years 1997-98, 1999-2000, 2000-01 and 2001-02 to be carried forward to the succeeding years, and if any unabsorbed depreciation or part thereof could not be set off till the assessment year 2002-03 then it would be carried forward till the time it is set off against the profits and gains of subsequent years.
Therefore, it can be said that, current depreciation is deductible in the 40 first place from the income of the business to which it relates. If such depreciation amount is larger than the amount of the profits of that business, then such excess comes for absorption from the profits and gains from any other business or business, if any, carried on by the assessee. If a balance is left even thereafter, that becomes deductible from out of income from any source under any of the other heads of income during that year. In case there is a still balance left over, it is to be treated as unabsorbed depreciation and it is taken to the next succeeding year. Where there is current depreciation for such succeeding year the unabsorbed depreciation is added to the current depreciation for such succeeding year and is deemed as part thereof. If, however, there is no current depreciation for such succeeding year, the unabsorbed depreciation becomes the depreciation allowance for such succeeding year. We are of the considered opinion that any unabsorbed depreciation available to an assessee on the 1st day of April, 2002 (the assessment year 2002-03), will be dealt with in accordance with the provisions of section 32(2) as amended by the Finance Act, 2001. And once Circular No. 14 of 2001 clarified that the restriction of eight years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from the assessment year 1997-98 up to the assessment year 2001-02 got carried forward to the assessment year 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as
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amended by the Finance Act, 2001, and were available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever.
For the aforesaid reasons, this writ petition succeeds and is allowed. The 41 notice issued under section 148 of the Income- tax Act, 1961, dated March 29, 2011, annexure A and the assessment order dated December 27, 2011, passed by the Assessing Officer annexure F respectively to the writ petition are quashed. Rule is made absolute. The parties shall bear their own costs.”
Similar proposition has been laid down by the Hon’ble Gujarat High Court in CIT Vs. Gujarat Themis Biosyn Ltd. (2014) 44 taxmann.com 204 (Guj) vide judgment dated 24.02.2014. The Visakhapatnam Bench of the Tribunal in JCIT Vs. M/s. Alufluoride Ltd in ITA No.134/Vizag/2013 relating to assessment year 2007- 08, vide order dated 05.03.2014 applying the ratio laid down by the Hon’ble Gujarat High Court in General Motors India Pvt. Ltd. Vs. DCIT (supra), held that the benefit of set off of unabsorbed depreciation of assessment years 1997-98 and 1998-99 could be allowed against the income relating to assessment year 2007-08. The Mumbai Bench of Tribunal in Hindustan Unilever Ltd. Vs. ACIT (supra), in turn following the ratio laid down by the Hon’ble Gujarat High Court in General Motors India Pvt. Ltd. Vs. DCIT (supra), had allowed similar claim of set off of unabsorbed depreciation pertaining to assessment years 1996-97 and 1997-98 against the income of assessment year 2006-07.
Another aspect of the issue is that where there is only judgment of High Court though not jurisdictional High Court and when no contrary High Court’s decision was available on the issue, then the High Court’s decision had to be followed in preference to the decision of Special Bench of the Tribunal. This was the decision of Third Member in the case of Kanel Oil & Exports Industries Ltd. reported in 126 TTJ 158 (Ahm) (TM). Consequently, we allow the ground of appeal No.1 raised by the assessee and direct the Assessing Officer to verify the claim of unabsorbed depreciation relating to assessment years 1994-95 to 1998-99 to be set off against the profits of amalgamated company.
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The ground of appeal No.1 raised by the assessee is thus, allowed.” 2.2. We find that the Tribunal, in the aforesaid order, on quantum addition, vide dated 26/06/2015 deleted the addition on the basis of which penalty was initiated/confirmed. In view of this factual matrix, we are of the view that penalty imposed u/s 271(1)(c) will not survive. Our view find support from the decision in K.C. Builders vs ACIT (2004) 265 ITR 562 (SC) and the ratio laid down in CIT vs S.P. Viz, 176 ITR 76 (Patna). Even otherwise, when the quantum addition is deleted, there remains no basis at all for levying the penalty for concealment or furnishing inaccurate particulars. The penalty cannot stand on its legs when addition on the basis of which the penalty was imposed remains no more in existence, thus, the appeal of the assessee is allowed and the ld. Assessing Officer is directed to delete the penalty.
Finally, both these appeals of the assessee are allowed.
This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 31/01/2017. Sd/- Sd/-
(Manoj Kumar Aggarwal) (Joginder Singh) लेखा सद�य / ACCOUNTANT MEMBER �या�यक सद�य /JUDICIAL MEMBER मुंबई Mumbai; �दनांक Dated : 31/01/2017 f{x~{tÜ? P.S/.�न.स.
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आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant (Respective assessee) 2. ��यथ� / The Respondent. 3. आयकर आयु�त(अपील) / The CIT, Mumbai. 4. आयकर आयु�त / CIT(A)- , Mumbai, 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड� फाईल / Guard file.
आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy//
उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील�य अ�धकरण, मुंबई / ITAT, Mumbai