9911796707
TMI Blog2013 (4) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... es' and Rs. 4,99,20,276 against 'Capital gains'. As per section 32 of the Income-tax Act, 1961, unabsorbed depre-ciation can be carried forward for indefinite period and it can be set off against any heads of income except the income under the head 'Salaries'. But unabsorbed depreciation relevant to the assessment year 1997-98 to the assessment year 2001-02 cannot be carried forward and set off against any other heads of income except income under the head 'Business or profession' for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed. Similarly, brought forward unabsorbed depreciation allowance for and up to the assessment year 1996-97 which could not be set off up to the assessment year 1996-97 shall be carried forward for set off against income under any head for a maximum period of eight assessment years starting from the assessment year 1997-98 up to the assessment year 2004-05. The abovecited legal position was also confirmed by the Special Bench of the Income-tax Appellate Tribunal, Mumbai, on June 30, 2010, in the case of Deputy CIT v. Times Guaranty Ltd. (I. T. A. No. 4917 and 4918/Mum/2008)-since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod of eight assessment years. Hence, according to the Assessing Officer, the set off of unabsorbed depreciation for the assessment year 1994-95 against the income of the assessment year 2004-05 was not in accordance with law and consequently income has escaped assessment. The second issue in relation to which the assessment is reopened is that while giving effect to the order of the Tribunal, income was computed under section 115JB without any addition on account of the provision for diminution in the value of investment and the provision for doubtful debts/advances. In this regard reliance has been placed on a subsequent amendment made by the Finance (No. 2) Act, 2009 with retrospective effect from April 1, 2001. According to the Assessing Officer, since the amendment to section 115JB has been brought about with retrospective effect from April 1, 2001, the Assessing Officer was ipsofacto entitled to issue a notice under section 148 since the relevant income by way of diminution in the value of assets/investments which was required to be added back has not been brought to tax. 4. The submission of the learned senior counsel appearing on behalf of the assessee is that- (i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion the provision for diminution in the value of investment and the increase in the provision for doubtful debts and advances, charged to the profit and loss account. This was a part of the normal computation of income by the assessee. The assessee effected a set off of the business loss brought forward from the assessment years 1999-2000 and 2000-01 against its business income. Similarly, the assessee made a set off of its unabsorbed depreciation for the assessment year 1994-95 against the business income, income from house property, capital gains and income from other sources. The tax audit report which was furnished together with the return of income provided details of the brought forward loss and of the depreciation allowance in exhibit H. Exhibit H provided under the head of depreciation an amount as assessed of Rs. 67.50 crores. Similarly, in the profit and loss account of the assessee for the year ending March 31, 2005, the total investments were reflected at Rs. 60.19 crores while there was a provision for diminution in value to the extent of Rs. 13.97 crores. Schedule H contained a provision for doubtful debts of Rs. 26.15 crores. 7. During the course of the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see to fully and truly disclose all material facts necessary for the assessment. Neither the reasons which have been communicated to the assessee nor for that matter the order passed on the objections raised contains any allegation or statement that there has been a failure on the part of the assessee to disclose fully and truly material facts necessary for the assessment. While a subsequent decision of a court or a legislative amendment enforced after the order of assessment may legitimately give rise to an inference of an escapement of income, before the Assessing Officer proceeds to reopen an assessment after the expiry of four years of the end of the relevant assessment year, he must none the less apply his mind to the fundamental question as to whether there has been a failure to disclose on the part of the assessee. In the present case, ex facie there is no such allegation. Moreover, the return of income and the material placed on the record by the assessee together with the return would make it abundantly clear that the assessee had set forth the basis of its claim and there was no suppression of material facts. In these circumstances, and for the reasons that are stated her ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
