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TMI Blog2017 (4) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by Ld CIT(A) on this issue and restore the same to the file of the AO for examining the same afresh. The assessee is directed to clarify about the name of the bank, demonstrate the actual utilisation of loan with necessary evidences to the satisfaction of the AO and to show as to how the provisions of sec. 28(iv) are not applicable. After hearing the assessee, the AO may take appropriate decision in accordance with the law. Quantum of unabsorbed depreciation & business loss brought forward from the earlier years that is eligible for set off - Held that:- Respectfully following the decision rendered by Hon’ble Gujarat High Court in the case of General Motors India P Ltd (2012 (8) TMI 714 - GUJARAT HIGH COURT ), we hold that the un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in AY 2008-09 relates to the assessment of ₹ 5,11,29,000/- relating to cessation of liability towards loan taken from bank. The facts relating to the same are that the assessee had taken loan from a bank. (In the assessment order, the bank s name is given as Union Bank of India. However, the assessee has stated the bank s name as ICICI Bank before Ld CIT(A)). The assessee was declared as Sick Industrial company and accordingly referred to BIFR in the earlier years. Later the banker assigned the loan to Asset Reconstruction Company (India) Ltd (ARCIL), which in turn, sold the assets of the company by inviting bids. After adjusting the sale proceeds against the outstanding loan, the balance amount of outstanding aggregating to ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws to contend that the principal portion of loan waived by a bank cannot be assessed u/s 41(1) of the Act. 4. On the contrary, the Ld D.R submitted that the assessee has not proved about actual utilisation of loan taken from the bank, i.e., it did not substantiate its claim that the loan was used for purchasing capital assets. She submitted that the Ld CIT(A) has also made specific observation on this line in paragraph 3.4 of his order. She further submitted that the amount so waived would fall under the scope of sec. 28(iv) of the Act. 5. The Ld A.R submitted that the loan amount was used to purchase capital assets only and the assessee would be in a position to substantiate the said claim, if one more opportunity is given. 6. Hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeding years. Accordingly the AO took the view that the unabsorbed depreciation relating to AY 2000-01 can be carried forward up to AY 2008-09 only. Accordingly he rejected the claim for set off of ₹ 62,21,149/-, referred above. The Ld CIT(A) also confirmed the same. 9. We notice that an identical issue was considered by the co-ordinate bench in the case of Archfine Chemicals P Ltd (ITA No.2414 2415/M/2012 dated 26-09- 2013) and the Co-ordinate bench, by following the decision rendered by Hon ble Gujarat High Court in the case of General Motors India P Ltd (Special Civil Application No.1773 of 2012 dated 23.08,2012), has decided the issue in favour of the assessee. For the sake of convenience, we extract below the operative porti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny unabsorbed depreciation or part thereof could not set off till the assessment year 2002-03, then it would be carried forward till the time it is set off against the profits and gains of subsequent years without any limit whatsoever. In view of above decision of the Hon'ble Gujarat High Court and also considering the decision of ITAT, Mumbai Bench in the case of Graham Firth Steel Products (I) Ltd (supra), we hold that ld. CIT(A) is not justified in not allowing set off of unabsorbed depreciation for the assessment years 1997-98 and 1998-99 against the profit for the assessment years 2005-06 and 2006-07. Hence, we vacate the orders of authorities below and direct the AO to allow unabsorbed depreciation for the assessment years 1997-98 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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