SAHYADRI KARAD HOSPITALS PRIVATE LIMITED,PUNE vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE 5, PUNE, PUNE
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Income Tax Appellate Tribunal, PUNE B BENCH : PUNE
Before: SHRI RAMA KANTA PANDA & SHRI SATBEER SINGH GODARA
PER SATBEER SINGH GODARA, J.M. :
These assessee's twin appeals ITA.Nos. 562 and
563/ PUN/2024, for assessment years 2019-2020 and 2020-
2021, arise against the Additional/JCIT (A)-2, Vadodara,
Vadodara's as many Din & Order Nos.ITBA/APL/S/250/
2023-24/1060277536(1) and 1060299953(1), both dated
30.01.2024, in proceedings u/s. 143(1) of the Income Tax Act,
1961, (in short the “Act”), assessment year-wise, respectively.
Heard both the parties at length. Case files perused.
2 ITA.Nos.562 & 563/PUN./2024
The assessee's "lead" appeal ITA.No.562/PUN/2024,
for assessment year 2019-20 pleads the following substantive
grounds:
On the facts and the circumstances of the case and in law,
lower authorities erred in observing that unabsorbed
depreciation of Rs.25,29,56,125 cannot be allowed to be
carry forward on the basis of intimation u/sec.143(1) for
AY 2018-19, the action is not in sync with the provision of
low and therefore same needs to be corrected Your
appellant prays accordingly.
On the facts and the circumstances of the case and in law,
CPC has erred in rejecting the claim of appellant, of
brought forward losses and absorbed deprecation of
Rs.56,13,90,129/- to be carry forward to next year
without assigning any reason whatsoever your appellant
prays for allowing such carry forward of losses and
Unabsorbed Depreciation as per provision of law.”
Both the parties next submit that the assessee's
latter appeal ITA.No.563/PUN/2024 for the Assessment Year
2020-2021 also pleads identical grounds since the only
difference therein is qua the amount of the unabsorbed
depreciation amounting to Rs.27,87,10,127/-, as disallowed in
both the lower proceedings.
3 ITA.Nos.562 & 563/PUN./2024
We note in this factual backdrop that the learned
lower appellate authority has upheld the CPC's action
proceedings disallowing the assessee unabsorbed depreciation
carried forward claim in A.Y. 2019-2020 as under :
“The claim of the appellant that brought forward losses of
the previous years to the tune of Rs.54,45,72,329/-
consisting of Rs.29,16,16,204/- as business loss carried
forward U/s 72 and Rs.25,29,56,125/- as unabsorbed
depreciation carried forward U/s 32(2) be allowed cannot
be accepted because as per intimation U/s 143(1) for AY
2018-19 it is clear that in AY 2018-19 losses to the tune of
only Rs.316465973/- were allowed to the appellant to be
carried forward to future set off. Further, such
adjustment/disallowance was accepted by the appellant
as no appeal has been filed against such disallowance for
AY 2018-19 as can be seen from records. Also, the
appellant vide notices dated 08.01.2024, 11.01.2024 and
16.01.2024 was specifically asked to explain the reasons
why depreciation losses disallowed in A.Y. 2018-19 was
not contested by it. The appellant vide submission dated
19.01.2024 failed to explain the same and stated that it
has enclosed the ITR of previous years in which it always
carried forward the previous year's losses. However, it
could not be established by the appellant that previous
year's losses were allowed to him in full till AY 2018-19 by
4 ITA.Nos.562 & 563/PUN./2024
the CPC. Therefore, it is not possible that the previous year
losses as computed by the CPC and accepted by the
appellant for AY 2018-19 can be increased in the next AY
ie 2019-20 or the subsequent AYs. Therefore, keeping in
mind the losses allowed by the CPC in the AY 2018-19,
the losses in the AY 2019-20 to be carried forward to the
future years cannot be more than Rs.316465973/-
(Excluding business loss of AY 2010-11 as the same can
not be carried forward per section 72(3) of the Act from the
total losses allowed till AY 2018-19)) given the fact that the
current year loss of Rs.55829267/- for the AY 2019-20
has already been allowed by the CPC. Hence, the brought
forward losses of the previous years to the tune of
Rs.316465973/- is admissible to the appellant. However
the AO is directed to verify the claim of the brought
forward business losses and also examine if the brought
forward losses have been reduced as a result of scrutiny
assessment in the previous years and allow the correct
losses determined in the assessments of respective years.
The appeal on the above grounds is partially allowed. The
summary of previous year losses allowed for future set off
in the year under consideration (subject to the verification
by the AO) is worked as under :
5 ITA.Nos.562 & 563/PUN./2024
AY Previous years Business loss allowed u/s.72. 2010-11 -- 2011-12 39011470 2012-13 44732466 2013-14 33800442 2014-15 40874267 2015-16 37799629 2016-17 38259895 2017-18 29564821 2018-19 52422983 Total 316465971
In the result, appeal is “partially Allowed”.
Learned counsel vehemently submits that both the
lower authorities have erred in law and on facts in disallowing
assessees unabsorbed depreciation claim of Rs.25,29,56,125/-
on the grounds that the same had been rejected in the
preceding assessment year 2019-2020 involving section 143(1)
"proceeding" dated 05.11.2019 (page 79 in the paper book).
The Revenue could hardly dispute that the said "processing"
had nowhere rejected the assessee's claim of unabsorbed
depreciation to carry forward the said sum. We further find
that section 143(1)(a) "processing" provision itself nowhere
stipulates such a disallowance in any of the corresponding
clauses (1) to (v) therein. We also note that section 143(1)(a)
1st proviso envisages that such an adjustment must be
6 ITA.Nos.562 & 563/PUN./2024
proposed by an intimation in writing or by electronic mode. We
emphasize here that there is no such intimation of assessee's
unabsorbed depreciation carry forward claim disallowance(s)
in section 143(1)(a) "processing" for the preceding assessment
year 2018-2019. That being the clinching case, we conclude
that both the lower authorities action is not sustainable in
law. We therefore, deem it appropriate to accept the assessee's
sole ground in principle and leave it open for the "CPC" to
compute and allow the impugned unabsorbed depreciation as
per law. This assessee's “lead” appeal ITA.No.562/PUN/2024
for the assessment year 2019-2020 is accepted.
Same order to follow in assessee's latter appeal
ITA.No. 563/PUN./2024 for the assessment year 2020-2021
since raising the very substantial issue (supra).
To sum-up, these assessee's twin appeals I.T.A.Nos.
562 and 563/PUN/2024 are allowed in above terms. A copy of
this common order be placed in the respective case files.
Order pronounced in the open court on 25.09.2024.
Sd/- Sd/- (RAMA KANTA PANDA) (SATBEER SINGH GODARA) VICE PRESIDENT JUDICIAL MEMBER
Pune, Dated 25th September, 2024
VBP/-
7 ITA.Nos.562 & 563/PUN./2024
Copy of the Order forwarded to :
The Appellant. 2. The Respondent. 3 The Pr. CIT concerned. 4. DR, ITAT, “B” Bench, Pune. 5. Guard File.
BY ORDER,
// TRUE COPY //
Senior Private Secretary ITAT, Pune.
