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TMI Blog2016 (1) TMI 753X X X X Extracts X X X X X X X X Extracts X X X X ..... " 3. Briefly stated facts are that during the course of assessment proceedings, the AO noted that the assessee company had made the following payments on account of the job work for procuring printed materials as per the specification of the assessee company from various parties: Sl. No. Ledger Head Amount 1. Carton Larger 164189.50 2. Carton Bullet 4214639.53 3. Carton KFS 61278.00 4. Crown Bullet 1895343.00 5. Crown KFL 56454.00 6. Crown KFS 96035.00 7. Foil Bullet 1709170.80 8. Foil KFS 68040.00 9. Foil KPL 41925.37 10. Foil KPL 1087655.00 11. Label Bullet Back 1138995.00 12. Label KFL 178800.00 13. Label KFL Back 28645.00 14. Label KFS 249828.00 15. Label KFS Back 51999.00 Total : Rs. 11042997.20 The Assessing Officer noted that as per the CBDT's Circular No. 715 dated 08.08.1995 Section 194C of the Act is applicable for supply of printed materials as per prescribed specification. He observed from the bills submitted by the assessee company that the assessee had made the above payments under the head 'procuring printed materials' from various parties and the suppliers had done the job work of printing on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T v. Dabur India Ltd. (2006) 283 ITR 197 (Del.) 5.2.6 In Balsara Home Products Ltd. v. ITO 94 ITJ 970 (Ahd.) : The issue before Ahemadabad Tribunal was that the applicability or otherwise of Section 194C to purchase of preprinted packing materials like tubes, cartons, corrugated boxes, etc. The Assessing Officer contended that printing according to specifications settled by the assessee involves contract of work liable to TDS under Section 194C. The Tribunal did not accepted this view and following Bombay High Court's decision in the case of BDS Ltd. dated 08.03.2004, it held that the transaction is contract of sale not liable to TDS under Section 194C. It held that .the printing on the material is incidental to supply of material i.e. sale of material. The Bombay High Court in the case of BDA Ltd. cited supra held that where an independent establishment was engaged in the business of supplying printed packaging material to various units and was not a captive unit of the assessee, the printing work though carried out to the specifications of the assessee cannot be a contract for work bit was only purchase of material and therefore, there was no need to deduct tax at source ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the supply of printed materials was a sale and could not be considered as work contract and tax was not required to be deducted u/s.194C of the Act, since the ancillary materials were not supplied by the assessee. It was also contended that Clause (iv)(e) of explanation with section 194C of the Act as introduced by Finance (No.2) Act, 2009, has placed the position beyond doubt by incorporating language to the effect that expression "Work" shall not include manufacture or supply of a material which is purchased from a person other than such customer. The assessee had further relied on Circular No.715 dated 08.08.1995 which provides that supply of printed material is covered by section 194C of the Act is also not applicable in this case since this circular does not mean that all cases of supply of printed material are liable to deduction of tax at source. We are of the view that it was only when the contract is for printing of materials and not for purchasing of material that the circular may be applicable. It is a fact that the assessee made outright purchases of goods for Rs. 1,10,42,997/- from various suppliers on which sales tax stands paid and as such, the transaction is one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 194C of the Act is not applicable. Accordingly, no disallowance by invoking the provisions of section 40(a)(ia) of the Act can be made. The CIT(A) has rightly deleted the addition and we confirm the same. This issue of revenue's appeal is dismissed. 6. The next issue in this appeal of revenue is against the order of CIT(A) deleting the disallowance by allowing set off of unabsorbed depreciation loss against current year's income. For this, revenue has raised following ground no.2: "2. For that in the facts and in the circumstances of the case the Ld. CIT(A) is not correct by allowing set off of unabsorbed depreciation loss against the current years income." 7. Brief facts relating to the case are that in the assessment order, the AO noted that, the unabsorbed depreciation for the AY 1989-1999 & 1999-2000 claimed by the assessee is not allowed to be set off this year since as per the Act, unabsorbed depreciation allowance for the above assessment years are only allowed to be carried forward for 8 subsequent assessment years. As per the scrutiny assessment order for assessment year 2008-09 only the unabsorbed depreciation for assessment year 2002-03 Rs. 1,47,98,454/- and unabso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... priority is followed in the subsequent year(s): . a) Current depreciation. b) Brought forward business loss c) Unabsorbed depreciation It may be said that if in the subsequent year(s), there is no brought forward business loss, unabsorbed depreciation can be added to current depreciation for the purpose of claiming deduction. 3. Continuity of business is not relevant for the purpose of above set off and carry forward. 4. Depreciation can be carry forward by the same assessee. This rule is, however, not applicable in some cases. In view of the foregoing discussion, the claim of the assessee company, in my opinion, the disallowance of the claim of set off of unabsorbed depreciation loss against the current income is not justified. The Assessing Officer is hereby directed to allow the same on the basis of the steps given above in accordance with law while giving effect to this order." Aggrieved, revenue came in second appeal before Tribunal. 8. We have heard rival submissions and gone through facts and circumstances of the case. We find that the assessee made a claim of unabsorbed depreciation loss of several years starting from A.Y. 1998-99 to 2004-05. The unabsorbed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BDT clarified the removal of the 8 year time period was "with a view to enable the industry to conserve sufficient funds to replace plant and machinery". The effect of the amendment is that the unabsorbed depreciation available to an assessee on 1.4.2002 (AY 2002-03) has to be dealt with in accordance with the s. 32(2) as amended by the Finance Act, 2001 and not by s. 32(2) as it stood prior to the said amendment. 9. Hon'ble High Court of Gujarat in the case of General Motors India Pvt. Ltd V DCIT (2013) 354 ITR 244 (Guj) considering the same issue enunciated the proposition of law as under:- "Had the intention of the Legislature been to allow unabsorbed depreciation allowance worked out in AY 1997-98 only for eight subsequent assessment years even after the amendment of s. 32(2) by Finance Act, 2001 it would have incorporated a provision to that effect. However, it does not contain any such provision and so a purposive and harmonious interpretation has to be taken. Therefore, the unabsorbed depreciation pertaining to AY 1997-98 can be carried forward for set-off indefinitely (A.Y'2006-07). " It is pointed out that in this case, which is as under:- "We are of the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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