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Income Tax Appellate Tribunal, MUMBAI BENCHES “E”, MUMBAI
Before: SHRI B.R.BASKARAN (AM) & SHRI RAM LAL NEGI (JM)
O R D E R PER RAM LAL NEGI, JM The revenue has preferred the appeal 26/12/2014 passed by the Ld. CIT(Appeals)-3, Mumbai for 2 & CO No 174/MUM/2016 Assessment Year: 2006-07 the Asst. year 2006-07, whereby the Ld. CIT(A) partly allowed the appeal filed by the assessee against assessment order dated 07/11/2012 passed u/s 143(3) r.w.s 147 of the Income Tax Act, 1961 (in short ‘ the Act’). The assessee has also filed cross objection No 174/M/2016 against the same order. Since the appeal and cross objection pertain to the same assessee for the same assessment year, both were clubbed and heard together and are being disposed of by this common order for the sake of convenience.
Brief facts of the case are that the assessee company filed its return of income for the relevant Asst. year declaring the total income as NIL, the book profit u/s 115JB of Rs. 8,94,77,720/-. The assessment order was accordingly passed u/s 143(3), after making disallowance of Rs. 3,09,180/- under Rule 8D of Income Tax Rules 1962, determining the total income at Rs. 8,97,86,900/-. Subsequently notice u/s 148 was issued to the assessee in response thereof the assessee submitted that the return filed on 28.11.2006 may be treated as the return filed in response to the notice u/s 148. The case was reopened inter alia on the ground of escapement of income.
3. In response to notice u/s 142(1) of the Act, the assessee furnished the details and on the basis of the said details the A.O made addition of Rs. 1,87,365/- on account of service tax unpaid u/s 43B and also disallowed the of set off unabsorbed depreciation for the A.Y. 97-98 amounting to Rs. 1.86 crores holding that as per amended to section 71 by the Finance Act, 1997 and unabsorbed depreciation for that order could only to carry forward for eight assessment years. The A.O further assessed Rs. 62,38,128/- as income from other sources which had been claimed by the assessee as business income.
3 & CO No 174/MUM/2016 Assessment Year: 2006-07
The assessee challenged the assessment order before the Ld. CIT(A). The Ld. CIT(A) after hearing the assessee decided the issues relating to disallowance u/s 43B and unabsorbed depreciation for the A.Y. 97-98 in favour of the assessee. The revenue is in appeal before the Tribunal against findings of the Ld. CIT(A) in respect of unabsorbed depreciation in question raising the following effective ground of appeal:-
1. “Whether on the facts and in the circumstances of the case and in law, the Learned CIT(A) is justified in allowing set off unabsorbed depreciation of A.Y. 97-98 against income of assessment year 2006- 07 under consideration despite the amendment to section 71 by the Finance Act 1997 permitting carry forward of unabsorbed depreciation for eight assessment years only which period does not cover the assessment year under consideration?.”
5. Before us the Ld. Departmental Representative (DR) relied upon the findings of A.O submitted that the Ld. CIT(A) has wrongly allowed the said appeal by allowing set off of unabsorbed depreciation of A.Y. 97-98 against income of assessment year 2006-07, ignoring the amended provision of section 71 by Finance Act, 1997 permitting carry forward of unabsorbed depreciation for eight assessment years only and the eight years period does not cover the assessment year under consideration.
On the other hand the Ld. Counsel for the assessee relying on the decision rendered by the Mumbai bench of the ITAT in the case of Bajaj Hindustan Ltd., 47 Taxman.com 333, submitted that the identical issue has been decided by the Mumbai bench of ITAT in favour of the assessee by following the the ratio laid down by the Hon’ble Gujarat High Court in General Motors India Pvt. Ltd. 4 & CO No 174/MUM/2016 Assessment Year: 2006-07 (Civil appeal No. 1773 of 2012) and the assessee’s case is covered by the said decision.
We have heard the rival submission and also perused the material placed on record. The Ld. CIT(A) has allowed the this ground of appeal of the assessee holding as under:
“3.2 I have perused the law in the matter. This issue came up before the jurisdictional tribunal in the case of Bajaj Hindustan Ltd.,47 Taxman.com 333, wherein the Tribunal held, relying upon the decision of the Gujarat High Court in General Motors India Pvt. Ltd., Civil appeal No. 1773 of 2012, as follows:
"9. We have heard both the parties and their contentions have been carefully considered. It is the contention of Ld DR that amended provisions of Section 32(2) as applicable from assessment year 2002-03 should- not be made applicable to the unabsorbed depreciation carried forward by the assessee from earlier years. To support such contention, the Ld. DR has relied mainly on the decision of Special Bench of the Tribunal in the case of Times Guaranty Ltd. (supra) which is directly on the issue. However, subsequently on the same issue the Hon'ble Gujarat High Court has rendered the decision in the case of General Motors India (P.) Ltd.(supra). Considering the decision of Hon'ble Gujarat High Court, despite there being existing decision of Special Bench of Mumbai Bench, the Mumbai Benches have taken a view that in view of subsequent decision of Hon'ble Gujarat High Court, the decision of Special Bench of Tribunal in the case of Times Guaranty Ltd. (supra) cannot be followed. For this purpose reference has been made by Ld. AR to the decision of Mumbai Bench i.e. in the case Hindustan Unilever Ltd. (supra) and Milton's (P.) Ltd. (supra). The relevant portion of the decision in the case of Milton's (P.) Ltd. has already been reproduced. No contrary decision has been brought to our notice.
5 & CO No 174/MUM/2016 Assessment Year: 2006-07
So far as it relates to reliance by Id. DR on the decisions of Hon'ble Madras High Court in the cases of (i) RPIL Signalling Systems Ltd. (ii) Pioneer Asia Packaging (P.) Ltd. and (iii) S & S Power Switchgear Ltd. (supra), it may be mentioned that these decisions related to amendment brought into the statute from assessment year 1997-98 and none of the decisions relates to amendment brought into statute by Finance Act, 2001, relevant to assessment year 2002-03 onwards. Whereas the decision of the Hon'ble Gujarat High Court in the case General Motors India (P.) Ltd.(supra) is directly on the amendment brought into statute by Finance Act, 2001 relates to assessment year 2002-03 onwards and is directly applicable to the facts of the present case. Therefore, reliance by Ld. CIT DR on the decisions of Hon'ble Madras High Court is misplaced.
So far as it relates to argument of Ld. DR that the issue before the Hon'ble Gujarat High Court was not relating to interpretation of amendment bought into statute in section 32(2) by Finance Act, 2001. It may be mentioned here that this contention of Ld. DR is not correct. The relevant portion of decision of Gujarat High Court has already been reproduced in para 7 of this order and it can be seen from these observations specific issue was considered and decided by Hon'ble Gujarat High Court. The Ld. CIT(A) while rendering the decision has relied upon the aforementioned decision of Hon'ble Gujarat High Court in the case of General Motors India (P.) Ltd.(supra). No contrary decision has been brought to our notice by the Id. DR. Mumbai Bench of the Tribunal have also followed the said decision and has decided the similar issue in favour of the assessee. There is no material on record to persuade us to take the contrary view. Therefore, we decline to interfere in the relief given by Id. CIT(A) and departmental appeals are dismissed. "
3.3 Relying upon the ratio of the above cited decision, it is held that the unabsorbed deprecation for A.Y.1997-98 is allowed to be set off against the current years income. This ground of appeal is therefore allowed.”
6 & CO No 174/MUM/2016 Assessment Year: 2006-07
We have gone through the findings of Ld. CIT(A) who has decided the issue in question issue in accordance with the ratio laid down by the Hon’ble Gujarat High Court in the case of General Motors India Pvt. Ltd.(supra), followed by the coordinate Bench in the case of Bajaj Hindustan Ltd.(supra). Since the issue involved in this appeal is identical to the ground of appeal raised in the case of Bajaj Hindustan Ltd. (supra), and the coordinate bench of the ITAT has decided the identical issue in favour of the assessee, we respectfully follow the decision rendered by the coordinate bench and uphold the findings of the Ld. CIT(A) and hold that that there is no legal or factual infirmity in the impugned order to interfere with the same. We, therefore, dismiss the sole ground of appeal of the revenue.
CO No. 174/Mum/2016. The assessee has filed the present Cross Objection on the following grounds:- 1. In the facts and the circumstances of the case and in law the Learned Assessing Officer erred reopening the assessment only a. on the basis of change of opinion by overlooking details filed in the assessment complete u/s 143(3) on 30/12/2008 b. issuing notice dated 30/03/2012 which is four years after the end of assessment year 2006-07 c. On the basis of audit objection d. Not furnishing reasons recorded for reopening.
2. We noticed that the cross objection is time barred as there is a delay of 383 days in filing of present CO. The assessee has not filed any application for condonation of delay in filing of cross objection. In the absence of any 7 & CO No 174/MUM/2016 Assessment Year: 2006-07 reasonable explanation to establish sufficient cause for delay, the CO cannot be entertained. Hence, the cross Objection is barred by llimitation. We, therefore, dismiss the cross objection in limine being not maintainable.
In the result, the appeal filed by the revenue and Cross Objection filed by the assessee for the A.Y. 2006-07 are dismissed.