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Income Tax Appellate Tribunal, NAGPUR BENCH : NAGPUR
Before: SHRI SATBEER SINGH GODARA & DR. DIPAK RIPOTE
ORDER PER SATBEER SINGH GODARA, J.M. :
This Revenue’s appeal arises against the CIT(A)-2, Nagpur, Nagpur’s order in case no.CIT(A)-2/166/2014-15- ITBA.No.10398, dated 27.07.2020, involving proceedings u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short “the Act”).
Despite service of notice, none appears at assessee’s behest. It is accordingly proceeded ex-parte.
2 ITA.No.108/Nag./2020 2. The Revenue pleads the following substantive grounds in the instant appeal :
“Whether on the facts and in circumstances of the case and in law the learned CIT(A)-2, Nagpur was justified in deleting addition made by the AO on account of unabsorbed depreciation who had relied on the decision of the Honorable ITAT, Mumbai in the case of DCIT-Cir-3, Mumbai -vs- Times Gurently Ltd. (2010) 40 SOT (Mum) wherein the Honourable ITAT has opined on the issue of carry forward of unabsorbed depreciation and which is squarely applicable to the facts and circumstances of this case.
Whether on facts and in the circumstances of the case and in law the Ld. CIT(A)-2, was justified in deleting the additions made on account of disallowances u/s 36(l)(iii) of the Income Tax Act, 1961 in spite of the fact that the as per audit report submitted by the assessee it was clear that assessee had given interest free advances and therefore, the AO had charged notional interest on it and disallowed the interest expenses claimed by the assessee. 3. Any other grounds of appeal at the time of hearing.”
3. Coming to the Revenue’s first and foremost issue of carry forward of the assessee’s unabsorbed depreciation disallowed by the Assessing Officer in his assessment dated 3 ITA.No.108/Nag./2020 03.02.2014; we note that the CIT(A) has accepted the latter’s stand as under :
4 ITA.No.108/Nag./2020 5 ITA.No.108/Nag./2020
Suffice to say, it has come on record that the instant issue as to whether the assessee is entitled to carry forward it’s unabsorbed depreciation/losses only for a period of eight years or not; is hardly res integra in light of honble jurisdictional high court’s decision in M/s. Hindustan Unilever Ltd., (supra). The Revenue could hardly pinpoint any illegality or infirmity to this settled legal proposition. We uphold the learned CIT(A)'s findings therefore.
6 ITA.No.108/Nag./2020 5. The outcome would be hardly any different in the Revenue’s later substantive ground seeking to revive sec.36(1)(iii) interest disallowance/addition of Rs.4,88,97,486 which has been reversed in the CIT(A)'s detailed discussion as under :
7 ITA.No.108/Nag./2020 8 ITA.No.108/Nag./2020
The Revenue could hardly rebut the clinching fact that the assessee had been having non-interest bearing funds exceeding the interest free loans (supra). That being the case, we conclude that the CIT(A) has rightly followed the foregoing various judicial precedents to conclude that the necessary inference in such an instance is of utilisation of interest free funds only. The Revenue’s instant second substantive ground also fails therefore.
This Revenue’s appeal is dismissed. Order pronounced in the open Court on 12.10.2023.