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2023 (11) TMI 991 - ITAT PUNEUnabsorbed depreciation for set off without any time limit - Scope of provisions of section 32(2) of the Act as amended by the Finance Act, 2001 - HELD THAT:- We note that now it is a settled position of law that the unabsorbed depreciation pertaining to A.Ys. 1997-98 to 2000- 01 could be carried forward and set off against the profits and gains of subsequent years without having 8 years of limit. Further, we note that the CIT(A) directed the AO to verify record and determine the correct allowable unabsorbed depreciation pertaining to A.Ys. 1997-98 to 2000-01, to allow the same to be carried forward for set off with income for the year under consideration and also to carry forward unabsorbed depreciation for set off in the subsequent years. In view of the decision of Hon’ble Supreme Court Petrofils Co-operative Ltd. [2021 (3) TMI 1092 - SC ORDER] as referred by the CIT(A) we do not find any infirmity in the reasons recorded by the CIT(A) and we agree with the same. Decided against revenue. Nature of receipt - write back of onetime settlement of loans treating the same as capital receipt in nature, not liable to tax - applicability of provisions u/s. 41(1) - HELD THAT:- . In the present case, loans were availed from ARCIL, Bank of India, Corporation Bank and Canara Bank - AO allowed waiver of loan amount availed from ARCIL stating it to be utilized for acquisition of capital assets. For remaining, he held used for working capital. The contention of the assessee is that, the loans were obtained for the said financial institutions for acquisition of fixed assets from 1997-98 to 2002-03 and contended the AO erred in stating the remaining amount as working capital. On perusal of the impugned order at page 48, held the same as capital receipt and not a revenue receipt. Therefore, in our opinion, the provisions u/s. 41(1) of the Act is not applicable for the reason that the assessee did not have the benefit of any allowance or deduction in respect of the said amount. Coming to the provisions u/s 28(iv) - We note that no evidences were furnished about the utilization of loan amounts before CIT(A), showing said loans utilized for acquisition of fixed assets etc. The CIT(A) mainly relied on the statements made by the assessee and also case laws. Further, we note that the DIT(R) addressed a letter to BIFR stating that no relief u/s. 28(iv) of the Act was considered by the Department. Further, the fact remains admitted that the assessee itself admitted that no relief u/s. 28(iv) of the Act is provided in the sanction scheme. since, the waiver is not in the nature of cash or money, condition provided u/s. 28(iv) of the Act is satisfied, Therefore, in the absence of any evidences showing that the loans availed, utilized for acquisition of fixed assets which are in capital in nature,we find the order of CIT(A) is not justified and restore the order of AO. Thus, the order of CIT(A) is set aside and the ground No. 2 raised by the Revenue is allowed. Provision of additional liability made in respect of Thane Worker which is later on write back under rehabilitation scheme of BIFR - HELD THAT:- We note that for year under consideration, the assessee failed to prove any such liability provided in the books of account and disallowed over and above the amount of final settlement - Therefore, we find force in the contention of ld. DR as to when no such provision remained standing in the accounts of the assessee, there is hardly any balances to be returned back. We also note that a similar findings were also noted by the CIT(A), however, while adjudicating the issue under consideration, he has carried away by aggregating the balance disallowance u/s. 43B of the Act by turning blind eye to section 43B allowance for the respective assessment year claimed by the assessee. Faced with this situation, the action of CIT(A) allowing the additional claim, in our considered opinion, deserves to be cancelled. We also note that the assessee vide its Miscellaneous Application applied to the CBDT for the claim of aforestated allowance which came rejected and this fact has been rightly travelled throughout both the remand reports of AO which are placed on record. Once, the claim for additional relief of reconsideration against the impugned ground was rejected by CBDT vide its order dated 10-09-2013, therefore, allowing such claim of assessee overstepping the order of rejection of higher authority, in our considered opinion, is not justified. In the light of our aforestated discussion, we reverse the allowance and ground No. 3 raised by the Revenue is allowed. Provision of interest which was later on write back under rehabilitation scheme of BIFR - In the Financial Year 2009-10 this outstanding accumulated amount of interest accrued but not due was merged with other loans which was subjected to concession - HELD THAT:- Once, this liability of interest accumulated but not due was clubbed and treated in accordance with the relief sought and granted, therefore, the question of reversing the same or writing back the same in the impugned year separately does not arise. No merits in allowing this additional claim to the appellant in the First Appellate proceedings. As assessee vide its Miscellaneous Application applied to the CBDT for the claim of aforestated allowance which came rejected and this fact has been rightly travelled throughout both the remand reports of AO which are placed on record. Once, the claim for additional relief of reconsideration against the impugned ground was rejected by CBDT vide its order dated 10-09-2013, therefore, allowing such claim of assessee overstepping the order of rejection of higher authority, in our considered opinion, is not justified. In the light of our aforestated discussion, we reverse the allowance and ground No. 4 raised by the Revenue is allowed. Write back of sundry creditors - assessee claimed relief of write back of sundry creditors on account of sanction granted by the BIFR - HELD THAT:- Taking into account the CIT(A) while allowing the ground raised by the assessee but directed the AO to verify whether such waiver is not allowed earlier and it is not on capital account as mandated by the DIT(R). This amount of sundry creditors beyond the iota of doubt represents a outstanding payment towards the expenditure incurred, claimed and allowed in the preceding assessment years. Therefore, the subsequent remission thereof which is credited in the books of account rightly, fails to prove the test of non-taxability. We also note that alongwith preceding two claims (i.e. ground Nos. 3 and 4) the claim for this additional amount, the assessee made Miscellaneous Application before the CBDT which was ultimately rejected. Therefore, the CIT(A)’s action in allowing the same would be in contravention of the order passed by the higher authority u/s. 119 - Decided in favour of revenue.
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