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TMI Blog2017 (2) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... II, Rajkot, dated 26/03/2013 vide order No.CIT(A)-II/RJT/0077/10-11 arising out of order u/s 143(3) of the IT Act, 1961 (in short the Act) framed on 24/12/2010 by ACIT, Gandhidham Circle, Gandhidham (Kutch). 2. The only ground in this appeal raised by the Revenue is against the order of ld. CIT(A) allowing assessee s claim of set off of brought forward unabsorbed depreciation of ₹ 2,95,27,925/- pertaining to Asst. Year 1999-2000. 3. Briefly stated facts relating to this issue as culled out from the records are that the assessee is a Registered Company engaged in the business of manufacturing of free flow Refined Iodized Salt, During the year under consideration the appellant had filed Return of Income U/s. 139(1) of the Income Tax Act on 29.09.2008 declaring total income at Rs. NIL after claiming set off of brought forward business loss of ₹ 30,82,831/- and showing book profit u/s 115JB of the Act at ₹ 8,14,04,114/-. The case was selected for scrutiny assessment and notice u/s 143(2) of the Act was issued on 25.08.2009, followed by notice u/s 142(1) of the Act. Against the income of ₹ 2,18,70,576/- the assessee claimed set off of unabsorbed depreciatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should not be allowed on the ground that a period of 8 years is already expired following the Asstt. Year in which such un-absorbed depreciation was arisen and according to the provision of Section 32(2) which was in existence at the relevant time, carry forward of an un-absorbed depreciation should not be allowed beyond a period of 8 years from the Asstt. Year in which such un-absorbed depreciation was first computed. In this regard we would like to submit that the law as existing on first day of the relevant Asstt Year in which such set off is claimed has to be seen and in that view of the matter Section 32(2) as substituted in the Asstt. Year under consideration would be applicable according to which the un-absorbcd depreciation of the earlier year will become part and parcel of the current year depreciation and the same is required to be allowed in the current year under question subject to the provision of Section 72(2) 73(3). As the substituted law permit us to carry forward unabsorbed depreciation indefinitely and such un-absorbed depreciation will become the current deprecation for the next Asstt. Year, we are very well legally entitled to claim set off of such brought fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This has been done by the A.O. by taking the details as per statement E of brought forward loss/ depreciation. 5.2 The appellant has contended that no opportunity was provided to him to explain such difference and clarify the issue to the Ld. A.O. The appellant has contended that it was only a typographical error. In support of his contention, the appellant has submitted the statement of income, tax audit report and relevant page of ITR-6 for A.Y. 07-08 which shows the carry forward business loss of ₹ 30,82,831/- and not ₹ 29,77,230/- 5.3 The appellant's contention and the submission have been carefully perused and found to be in order. The A.O. is directed to allow the brought forward business loss for A.Y. 01-02 at ₹ 30,82,831/- as against ₹ 29;77,230/- allowed in the assessment order. This ground of appeal is' allowed. Ground No.2 : The Learned Assessing Officer has further erred in law as well as on facts in denying the set off of Brought forward unabsorbed depreciation of Asstt. Year J 999-2000 amounting to . ₹ 2,94,27,925/- against the income of current year and carry forward of balance amount for the next Asstt. Year. 6, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 2001 it would have incorporated a provision to that effect. However, it does not contain any such provision. Hence keeping in view the purpose of amendment of section 32(2) of the Act, a purposive and harmonious interpretation has to be taken. While construing taxing statutes, rule of strict interpretation has to be applied, giving fair and reasonable construction to the language of the section without leaning to 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l High Court in the case of CIT vs. Gujarat Themis Biosyn Ltd. (supra) has also dealt a similar issue wherein the Assessing Officer denied the claim of set off of unabsorbed depreciation for Asst. Year 1997-98 against the income for Asst. Year 2006-07 by taking a view that it was eligible only for 8 years which expired in Asst. Year 2005-06. Hon. Court adjudicated this fact deciding the issue in favour of assessee by considering the decision in the case of General Motor India P. Ltd. (supra) by observing as follows :- Held : High Court notice that in the instant case, the Tribunal while dealing with this case has noted that the carry forward of unabsorbed depreciation concerning A.Y. 2001-02 and assessment years prior thereto can be set off in subsequent years without any set time limit, considering the decision in the case of General Motors India P. Ltd. (supra) wherein this Court has held that carry forward of depreciation prior to assessment can be set off in subsequent years without setting time limit. The Tribunal has rightly applied the law to the facts of the instant case.Carry forward of unabsorbed depreciation concerning previous AYs can be set off in subsequent yea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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