DCIT CEN CIR 2(4), MUMBAI vs. AJMERA CEMENT P.LTD, MUMBAI

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ITA 761/MUM/2015Status: DisposedITAT Mumbai23 June 2016AY 2008-093 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 upheld the CIT(A)'s decision, agreeing that unabsorbed depreciation from the specified years could be set off against current income. The balance could be carried forward, following precedents from the Gujarat High Court and a coordinate bench of the Tribunal.

What were the facts?

The Revenue appealed against the CIT(A)'s order allowing the assessee to set off unabsorbed depreciation from assessment years 1997-98 to 1999-2000 against current year's income. The Assessing Officer had disallowed this on the grounds of an 8-year time limit for carrying forward depreciation.

What were the issues?

Whether unabsorbed depreciation from assessment years prior to the amendment of Section 32(2) by the Finance Act, 2001, is subject to an 8-year carry-forward limit for set-off against current income.

Which sections of the Income-tax Act were involved?

Section 32(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI B.R. BASKARAN (AM)

For Appellant: Shri Prakash K. Jotwani
For Respondent: Shri Mohammed Rizwan
Hearing: 23.06.2016

The appeal filed by the Revenue is directed against the order dt. 12.12.2014 passed by Ld. CIT(A) – 48, Mumbai and it relates to Assessment Year 2008-09. The Revenue is aggrieved by the decision of the Ld. CIT(A) in holding that the unabsorbed depreciation relating to Assessment Years 1997-98 to 1999-2000 can be set-off against the current year’s income and the balance amount not so set off could be carried forward in the succeeding years.

2 M/s. Ajmera Cement Pvt. Ltd.

2.

I have heard the parties and perused the record. The Assessing Officer held that the unabsorbed depreciation pertaining to Assessment Years 1997-98 to 1999-2000 cannot be set-off against the current year’s income, on the reasoning that the provisions of Sec. 32(2) of the Act, prior to its amendment by Finance Act, 2001 w.e.f. 1.4.2002, had provided a time limit of 8 years for carrying forward the unabsorbed amount of depreciation. The Ld. CIT(A), however, allowed the claim of the assessee by following the decision rendered by Hon’ble Gujarat High Court in the case of General Motors India Pvt. Ltd. (Special Civil Application No. 1773 of 2012) dt. 23.8.2012. The Ld. CIT(A) also noticed that the decision rendered by the Hon’ble Gujarat High Court in the above said case has been followed by the coordinate bench of Tribunal in the case of Arch Fine Chemicals P. Ltd. (ITA Nos. 2414 & 2415/Mum/2012 dt. 9.10.2013). Accordingly, the Ld. CIT(A) decided the issue in favour of the assessee and directed the Assessing Officer to allow set-off of unabsorbed depreciation brought forward from Assessment Years 1997-98 to 1999-2000 and allow carry forward of balance remaining after set-off. Aggrieved, the Revenue has filed this appeal before us.

3.

The Ld. Counsel for the assessee placed heavy reliance on the order passed by the Ld. CIT(A) and submitted that the Ld. CIT(A) has followed the decision rendered by the Hon’ble Gujarat High Court as well as the coordinate bench of the Tribunal. On the contrary, the Ld. DR placed reliance on the order passed by the Assessing Officer.

4.

Having heard the rival contentions, I do not find any reason to interfere with the order passed by the Ld. CIT(A), since he has decided

3 M/s. Ajmera Cement Pvt. Ltd. the issue by following the decisions rendered by the Hon’ble Gujarat High Court and the coordinate bench of the Tribunal (referred supra).

5.

In the result, appeal filed by the Revenue is dismissed.

Order pronounced in the open court on 23rd June, 2016.

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