D.C.I.T CIR - 11,KOLKATA, KOLKATA vs. M/S EPCOS INDIA PVT LTD, NORTH 24 PARGANAS

Brief facts of the case are that the assessee is a company and is engaged, inter alia, in the business of manufacturing and selling of soft ferrite components. The assessee filed its revised return of income for the assessment year 2006-07 on 3rd October, 2007 declaring a total taxable Income at nil. In the aforesaid return, the unabsorbed business loss and unabsorbed depreciation allowance were claimed to be carried forward. The return of income was processed u/s 143( 1) of the Income- tax Act, 1961 (hereinafter referred to as the' Act'). During the course of the assessment proceedings the copy of the Tax Audit Report was filed evidencing the unabsorbed business loss and unabsorbed depreciation allowance to be carried forward. The assessment was completed u/s 143(3) of the Act vide order dated December 24, 2009. In the said order, the carry forward of the unabsorbed depreciation allowance as claimed by the assessee in the return of income was not disturbed. Subsequently the A.O. initiated reassessment proceedings vide notice under section 148 of the Act dated 30.03.2011 for the assessment year under consideration. The Assessing Officer has also issued notice under section 142(1) of the Act dated 28.11.2011 and further a letter on even date with detailed reasons justifying the reopening of the assessment for the captioned assessment year. The Assessing Officer disallowed the unabsorbed depreciation allowance upto AY 1998-99 to be carried forward.

The assessee is aggrieved by the initiation of reassessment proceedings as well as the findings of the Assessing Officer in the aforesaid reassessment order and hence, it had preferred an appeal before the ld. CIT(Appeals) against the action of the Assessing Officer. ./2013 Assessment year: 2006-2007 & C.O. No. 77/KOL/2013 (in I.T.A. No. 1161/KOL./2013) Assessment year: 2006-2007 Page 3 of 5

The assessee contended before the ld. CIT(Appeals) that during the previous year relevant to the assessment year 2006-07 claimed, inter alia unabsorbed depreciation allowances upto the assessment year 1998-99 to be carried forward and to be set off in the future years. The tax audit report filed by the assessee before the Assessing Officer for the captioned assessment year also disclosed a detailed list of the unabsorbed depreciation allowances to be carried forward and to be set off in the future years.

The ld. CIT(Appeals) considering above granted relief to the assessee by observing in his impugned order as under:- “Appeal is against the disallowance of carry forward of unabsorbed depreciation of Rs.3,66,28,773/-. The AO in his assessment order has clearly mentioned that unabsorbed depreciation for AY 1998-99 was to be claimed/ set off upto AY 2006-07 only it could not be carried forward and set off beyond that. During the appellate proceeding the AR has submitted a copy of the order of the jurisdictional Hon’ble Kolkata Tribunal in the case of Bengal Tea & Fabrics Ltd. –vs.- DCIT, Circle-4, Kolkata (ITA No. 467/KOL/2012 dt. 26.07.2012) wherein the Tribunal has categorically given its finding that the assessee company would be entitled to set off unabsorbed depreciation for the AYs 1997-98, 1988-99 against the income of AY 2008- 09 (i.e. beyond the AYs 2004-05/2005-06. The Hon'ble Kolkata Tribunal has also discussed, analyzed and accepted the principles of the decisions of Hon'ble Karnataka High Court in the case of Karnataka Cooperative Milk Producers Federations Ltd. Vs. DCIT 53 DTR 81 (Karnataka) on the same issue. I have considered the finding of the A.O, in the assessment order dt. 16-12- 2011 and the written submission and case laws filed by the A.R. during the appellate proceeding. I find that this case is squarely covered by the Kolkata Tribunal's decision in the case of Bengal Tea & Fabrics Ltd. (supra). Thus respectfully following the ratio decided by the Jurisdictional Appellate Tribunal, assessee’s appeal on ground no. 3 & 4 are allowed”. ./2013 Assessment year: 2006-2007 & C.O. No. 77/KOL/2013 (in I.T.A. No. 1161/KOL./2013) Assessment year: 2006-2007 Page 4 of 5 Being aggrieved with the order of ld. CIT(Appeals), the Revenue is in appeal before the Tribunal.

At the time of hearing before us, the ld. D.R. relied on the order of Assessing Officer. On the other hand, ld. counsel for the assessee has relied on the order of ld. CIT(Appeals). He also relied on the decision dated 11.05.2016 of this Tribunal in assessee’s own case for the assessment year 2004-05 in ITA No. 815/KOL/2013.

We have heard the rival submissions and also perused the relevant material available on record. We find that the issue under consideration is squarely covered by the decision dated 11.05.2016 of this Tribunal in assessee’s own case for the assessment year 2004-05 in wherein it was held as under:- “We have considered the rival submissions and are of the view that in the light of the decision of the Hon’ble Gujarat High Court in the case of General Motors India Pvt. Limited (354 ITR 244) (supra), which has the effect of overruling the decision of the Special Bench in the case of Times Guarantee [40 SOT 14 (Mum.)(SB) (supra) and also on the basis of other decisions referred by the assessee before CIT(A), the order of the CIT(A) does not call for any interference. Accordingly, the appeal by the revenue is dismissed”.

As the issue involved in the year under consideration as well as all the material facts relevant thereto is similar to A.Y. 2004-05, we respectfully follow the decision of this Tribunal rendered for the said year and uphold the impugned order of the ld. CIT(Appeals) deleting the disallowance made by the Assessing Officer on account of carry forward of unabsorbed depreciation.

The Cross Objection of the assessee being C.O. No. 77/KOL/2013 is in on the assumption of jurisdiction and validity of reassessment proceedings. As we have already decided the issue in the appeal filed by the Revenue on merits in favour of the assessee, we do not consider it ./2013 Assessment year: 2006-2007 & C.O. No. 77/KOL/2013 (in I.T.A. No. 1161/KOL./2013) Assessment year: 2006-2007 Page 5 of 5 necessary to address the grounds raised in the C.O. Hence, the Cross Objection filed by the assessee is dismissed as infructuous.

In the result, the appeal of the Revenue as well as the Cross Objection of the assesese both are dismissed. Order pronounced in the open Court on June 22, 2016.