2018 (12) TMI 404 - AT - Income Tax

Claim of brought forward unabsorbed depreciation - Unabsorbed depreciation would be calculated at a higher figure than one accepted by the AO - stand of the assessee is that it has filed return in the past and also computation of income if those computations are perused then unabsorbed depreciation would be calculated at a higher figure than one accepted by the AO - Held that - Our attention was drawn towards the copy of acknowledgement of filing of Income Tax return. Similarly, on acknowledgement exhibiting filing of return in AY 1999-2000 has been placed. Both these documents have not been relied upon rather they are belied by both the authorities in a concurrent finding. We have perused these acknowledgements alongwith other acknowledgements for other assessment years. We find that the diary number/receipt number showing submission of returns are not verifiable. The Revenue authorities were reluctant in putting their reliance on these documents for accepting the claim of the assessee. They have recorded a finding of fact. We do not find merit in the contention of the learned counsel for the assessee for remitting this issue to the file of the AO. These documentations have been specifically examined and assessee failed to create a dent in the finding recorded by the AO. We could appreciate the claim of the assessee if it has some new materials which required to be investigated and if investigated it can give rise to different result. During the course of hearing, we have directed the learned counsel for the assessee to show us the original copies of these acknowledgements so that we can make some decisions about the genuineness of the document. We have also desired let the Directors who have signed those returns filed their affidavits so that some new angle of inquiry could be explored but learned counsel has expressed his inability in filing the affidavits of the Directors/authorized persons who signed these returns as well as original copies of these acknowledgements. We do not see any reason to remit any issue to AO for re-analyzing those very details which have been gone through by both the authorities

Summary

Issues Involved:
1. Maintainability of the Revenue's appeal based on tax effect.
2. Validity of the assessee's grounds of appeal.
3. Rejection of the assessee's claim regarding brought forward unabsorbed depreciation.

Detailed Analysis:

1. Maintainability of the Revenue's Appeal Based on Tax Effect:
The Revenue's appeal was dismissed as non-maintainable due to the tax effect being less than ?20 Lakhs. The learned counsel for the assessee highlighted that the relief given by the CIT(A) resulted in a tax effect of ?9,23,660/-, which is below the threshold set by the Board's instruction no. 3 of 2018 dated 11/07/2018. The learned DR could not contest this assertion. The Tribunal acknowledged the Board's instruction, which applies to pending appeals, and dismissed the Revenue's appeal. However, it was clarified that the Revenue could apply for a recall of the order if, upon re-verification, the case falls within exceptions or the tax effect exceeds ?20 Lakhs, within the time limit provided in the Act.

2. Validity of the Assessee's Grounds of Appeal:
The assessee's appeal included six grounds, but several were dismissed for various reasons:
- Ground no.1, challenging the reopening of the assessment, was not pressed by the learned counsel for the assessee and thus rejected.
- Ground no.5, challenging the initiation of penalty proceedings under s.271(1)(c) of the Act, was deemed premature and not maintainable.
- Ground no.6 was a general ground that did not specify any grievance and was therefore rejected.

3. Rejection of the Assessee's Claim Regarding Brought Forward Unabsorbed Depreciation:
Grounds nos. 2, 3, and 4 were interconnected, focusing on the rejection of the assessee's claim for brought forward unabsorbed depreciation of ?1,44,94,528/-. The assessee's return for AY 2008-09 declared total income at nil after setting off brought forward losses. In the reassessment, the AO rejected the claim for unabsorbed depreciation, and the CIT(A) upheld this decision. The CIT(A) noted that the assessee's claim was unsupported by documentary evidence, such as filed returns of income or acknowledgments of receipt by the Income Tax Department. The CIT(A) found discrepancies between the amounts claimed by the assessee and those reported in the audit report and computation sheets.

The Tribunal, after reviewing the records and arguments, found no merit in the assessee's contention. The Tribunal noted that the assessee failed to provide original documents or affidavits from directors to substantiate the claim. The Tribunal upheld the findings of the Revenue authorities, stating that the assessee could not demonstrate any new material that would warrant a different conclusion. Consequently, the Tribunal rejected the grounds of appeal related to the claim for brought forward unabsorbed depreciation.

Conclusion:
Both the Revenue's and the assessee's appeals were dismissed. The Revenue's appeal was dismissed due to the tax effect being below the threshold, while the assessee's appeal was dismissed due to lack of evidence supporting the claim for brought forward unabsorbed depreciation. The Tribunal found no reason to interfere with the detailed findings of the CIT(A).