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TMI Blog2016 (5) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... upholding the action of the Assessing Officer in not allowing the set off of brought forward unabsorbed depreciation amounting to Rs. 16,828,559/- ( in respect of assessment year 2001-02) against the business income for assessment year 2006-07 on the ground that such loss has been set off in assessment year 2005-2006. 3. The learned Commissioner of Income-tax (Appeals) erred in upholding the action of the Assessing Officer in disallowing a sum of Rs. 64,18,653/- comprising of Rs. 37,00,000/- being Fringe Benefit Tax, Rs. 4,50,000/- being Wealth-tax and Rs. 22,68,653/- being Prior Period Expenses while computing Book Profit under section 115 JB of the Act. 4. The appellant submits that the Assessing Officer be directed: (a) to allow set-off of brought forward unabsorbed depreciation in respect of assessment year 2001-02 amounting to Rs. 1,68,28,559/-; (b) to delete the disallowance of a sum of Rs. 64,18,653/- (Rs.37,00,000 being Fringe Benefit Tax, Rs. 4,50,000 being wealth tax and Rs. 22,68,656/- being prior period expenses)while computing Book Profit as per provisions of section 115JB. and to modify the assessment in accordance with the provisions of the Act and also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee was wrongly re-opened under the provisions of section 147 of the Act for the reasons that the assessee had claimed the unabsorbed depreciation in respect of A.Y.2001-02 at Rs. 4,23,73,057/- which was also allowed in the assessment framed u/s 143(3) of the Act as against the correct allowable claim of Rs. 2,55,44,498/- thereby resulting into excess claim of unabsorbed depreciation to the tune of Rs. 16,828,559/-. The ld. Counsel submitted before us that the AO had wrongly re-opened the assessment u/s 147 of the Act when an alternative effective remedy was available before the AO to rectify the assessee's excess claim of brought forward depreciation u/s 154 of the Act. The reopening of the case u/s 147 of the Act to re-open the entire assessment which was already concluded was totally illogical, illegal and against the provision of Income Tax Act. The ld. Counsel argued that in order to correct a mistake in the order of the AO there were three possible remedies available under the Act namely (i) a rectification under section 154 of the Act ; (ii) a revision under section 263 of the Act ; and (iii) a reassessment under section 147. All these remedies were exercisable by differ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orward depreciation amounting to Rs. 1,68,28,559/- as is clear from the reasons recorded u/s 148 (2) of the Act. The reasons recorded u/s 148 are reproduced as under:- "The assessee company is engaged in the business of manufacturing and sale of polysterene for various household and consumer durables. The return for A.Y.2006-07 was filed on 29/11/2006 declaring income at Rs. Nil and tax was paid on book profit as per s. 115JB. The return was revised declaring the income at Rs. Nil while book profit u/s 115JB was revised on account of adding back the deferred tax liability. The assessment was completed u/s.143(3) on 24/12/2008 determining total income at Rs. Nil and Book Profit u/s 115JB at Rs. 31,25,75,720/-. Addition u/s 14A amounting to Rs. 6,77,706/- was made in the assessment order under both normal and provisions of s. 115JB. From the perusal of details of AY 2005-06, the unabsorbed depreciation of AY 2001-02 that is carried forward for set-off with current year's income remains at Rs. 2,55,44,498/-, while the assessee company has claimed the same at Rs. 4,23,73,057/- in its return of income for AY 2006-07 and the same has been allowed in the order u/s 143(3). Thus, an ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g an order u/s 143(3) otherwise it will result into unending litigation and unfettered powers in the hands of tax authorities putting the assessee to huge detriment and inconvenience. The Act has provided for various provisions remedying the various types errors for apparent computation error and also for those involving complex and complicated issue which are otherwise than apparent error. The various possible remedies available under the Act are namely (i) a rectification under section 154 of the Act; (ii) a revision under section 263 of the Act; and (iii) a reassessment under section 147 of the Act. Thus the AO is duty bound to take recourse to such remedy which is most suitable to the facts of the particular case and causes least prejudice, detriment and disturbance to the assessee and not in an arbitrary and whimsical manner otherwise the spirit of law would be defeated. In the present case to correct a simple apparent mistake which could have been rectified by the AO by exercising his power u/s 154 of the Act, the AO choose to re-open the entire assessment and thus assumed the unlimited jurisdiction and various additions were made apart from the excess claim of depreciation a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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