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TMI Blog2016 (3) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... f assesse - I.T.A. No. 401/Ahd/2012 - - - Dated:- 29-2-2016 - Shri Pramod Kumar, Accountant Member And Shri Kul Bharat, Judicial Member For the Appellant : Shri S. N. Soparkar, AR For the Respondent : Shri A.K. Pandey, Sr.DR ORDER Per Shri Kul Bharat, Judicial Member : This appeal by the Assessee is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-I, Baroda [ CIT(A) in short] dated 02.12.2011 pertaining to Assessment Year (AY) 2008-09. The Assessee has raised the following grounds of appeal:- 1. On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income-tax (Appeals) has erred 2. The appellant craves leave to amend, alter or add to the above grounds of appeal. 1. Ld. CIT (A) erred in law and on facts in confirming action of AO in adopting FMV (Fair Market Value) of ₹ 20/- per sq ft in place of ₹ 30/- adopted by the appellant as on 01/04/1981. Ld. CIT (A) further erred in not appreciating the fact that AO ought to have referred the valuation to DVO instead of estimating FMV himself. Ld. CIT (A) ought to have accepted FMV adopted by the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al before the ld.CIT(A), who after considering the submissions of the assessee partly allowed the appeal. The ld.CIT(A) upheld the action of the AO for computing the LTCG at ₹ 7,43,86,680/- in respect of claim of set off of business loss and unabsorbed depreciation. The ld.CIT(A) rejected the claim for setting off of the brought forward business loss of ₹ 3,63,88,385/- against the income under the head in the assessment year under appeal. However, in respect of the unabsorbed depreciation, the ld.CIT(A) gave direction to AO for AYs 1990-91, 1991-92, 1993-94, 1995-96 1996-97 could have been set off upto AY 2004-05. In respect of unabsorbed depreciation pertaining to AYs 1997-98, 1993-94 1999-2000 being the period held that the depreciation could not be allowed. However, in respect of the unabsorbed depreciation pertaining to AY 2002-03 to 2007-08, the ld.CIT(A) allowed the set off. In respect of initiation of penalty proceedings, the ld.CIT(A) dismissed the ground being premature. Aggrieved by the order of the ld.CIT(A), the assessee is further in appeal before us. 3. Ground Nos.1 2 are against the adoption of Fair Market Value (FMV) of ₹ 20 per sq.ft in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not appreciating commercial view point of the assessee. The ld.Sr.counsel for the assessee submitted that the ld.CIT(A) ought to have allowed the claim of unabsorbed depreciation in full. Further, he submitted that the issue is covered in favour of assessee. 6.1. On the other hand, the ld.Sr.DR supported the orders of the authorities below. 7. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A) has given direction in respect of unabsorbed depreciation at page No.12 of his order, which read as under:- (1) Brought forward depreciation for and upto AY 1996-97 (termed as First unadjusted depreciation allowance by Hon ble (ITAT), i.e. for AYs 1990- 91, 1991-92, 1993-94, 1995-96 1996-97 as per chart above could have been set off upto AY 2004-05 only. The same cannot be set off in AY 2008-09. (2) Unabsorbed depreciation pertaining to AYs 1997-98, 1993-94 1999- 2000 (termed as Second unabsorbed depreciation allowance by Hon ble ITAT) cannot be set off in AY 2008-09, eight year period having expired. For AYs 2000-01 2001-02, there is no unabsorbed depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the side of assessee or the revenue. But if the legislature fails to express clearly and the assessee becomes entitled for a benefit within the ambit of the section by the clear words used in the section, the benefit accruing to the assessee cannot be denied. However, Circular No.14 of 2001 had clarified that under Section 32(2), in computing the profits and gains of business or profession for any previous year, deduction of depreciation under Section 32 shall be mandatory. Therefore, the provisions of section 32(2) as amended by Finance Act, 2001 would allow the unabsorbed depreciation allowance available in the A.Y. 1997-98, 1999-2000, 2000-01 and 2001-02 to be carried forward to the succeeding years, and if any unabsorbed depreciation or part thereof could not be set off till the A.Y. 2002-03 then it would be carried forward till the time it is set off against the profits and gains of subsequent years. 38. Therefore, it can be said that, current depreciation is deductible in the first place from the income of the business to which it relates. If such depreciation amount is larger than the amount of the profits of that business, then such excess comes for absorption from t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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