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TMI Blog2018 (3) TMI 1343X X X X Extracts X X X X X X X X Extracts X X X X ..... following the above, we confirm the order of CIT(A) and this issue of Revenue’s appeal is dismissed. - ITA No. 972/ Mum/ 2016 - - - Dated:- 21-3-2018 - Sri Mahavir Singh, JM And Sri Ramit Kochar, AM Revenue by : V Justin , DR Assessee by : S.G. Dandawate Co., AR ORDER Per Mahavir Singh, JM This appeal by the Revenue is arising out of the order of CIT(A)-21, Mumbai, in appeal No. CIT(A)-21/ITO-9(3)(1)/I.T.-146/2014-15 dated 28- 12-2015. The Assessment was framed by ITO Ward 9(3)(2), Mumbai for the A.Y. 2006-07 vide order dated 21.03.2014 under section 143(3) of the Income Tax Act, 1961(hereinafter the Act ). 2. The only issue in this appeal of Revenue is against the order of CIT(A) deleting the disallowance of unabsorbed depreciation and carried forward of unabsorbed depreciation claimed for earlier years. For this Revenue has raised the following ground No. 1: - 1. Whether on the facts and circumstances of the case in law, the ld. CIT(A) is correct in directing Assessing Officer to allow the adjustment of unabsorbed depreciation and carry forward of unabsorbed depreciation claimed for AY 2001-02 and earlier years by assessee of ₹ 57,22,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat only a limited period the carrying forward was restricted to eight years,that assessee was entitled to set off unabsorbed depreciation as mentioned in the application filed u/s.154 of the Act.He relied upon the orders of the Hon ble High Court of Madras delivered in the case of Craigmore Plantations India Limited(253ITR447).He also relied upon the order of the Hon ble High Court of Gujarat delivered in the case of General Motors India Pvt. Ltd. dated 23.08.2012.Departmental Representative (DR) supported the order of the AO and FAA.He relied upon the order of Special Bench of ITAT in the case of Times Guaranty Ltd. (ITA No. 4917 4918/Mum/2008-AY 2003-04 2004-05 (131 TTJ) (Mum) (S.B. 257). 2.3.We have heard the rival submission and perused the material before us.We have heard the rival submissions and perused the material on record.It appears that while deciding the issue of un-absorbed depreciation, AO and the FAA have not considered the amended provisions of the Sec.32(2) of the Act in right perspective. Perusal of provisions of section 32 show that prior to 01- 04- 1997,un-absorbed depreciation of the previous year used to be claimed as current depreciation and would be al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which was not eligible for being carried forward and set off against the income for the A.Y. 2006- 07. 31. Prior to the Finance Act No.2 of 1996 the unabsorbed depreciation for any year was allowed to be carry forward indefinitely and by a deeming fiction became allowance of the immediately succeeding year. The Finance Act No.2 of 1996 restricted the carry forward of unabsorbed depreciation and set-off to a limit of 8 years, from the A.Y.1997-98. Circular No.762 dated 18.2.1998 issued by the Central Board of Direct Taxes (CBDT) in the form of Explanatory Notes categorically provided, that the unabsorbed depreciation allowance for any previous year to which full effect cannot be given in that previous year shall be carried forward and added to the depreciation allowance of the next year and be deemed to be part thereof. 32. So, the unabsorbed depreciation allowance of A.Y. 1996-97 would be added to the allowance of A.Y. 1997-98 and the limitation of 8 years for the carry-forward and set-off of such unabsorbed depreciation would start from A.Y. l997-98. X X X X X X X X X X X X X 36. The purpose of this amendment has been clarified by Central Board of Direct Taxe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onious 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 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 dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the provisions of section 32(2) as amended by Finance Act 2001. Thus, the restriction of carry forward to 8 years and restriction of adjustment against only business income is not applicable after 1.04.2002 even in respect of brought forward unabsorbed depreciation on that date. Since the recent decisions of [TAT Mumbai on this issue is in favour of the appellant, the grounds of appeal in this regard is allowed and the AO is directed to allow the adjustment of unabsorbed depreciation and carry forward of unabsorbed depreciation claimed for AY 2001-02 and earlier years by assesse of ₹ 57,22.6131-as current depreciation and allowed to be set off against the income This disposes ground 6 and additional ground B which is allowed. Aggrieved, Revenue came in second appeal before Tribunal. 4. We have heard the rival contentions and gone through the facts and circumstances of the case. The learned Sr. Departmental Representative also admitted that this issue is covered in favour of assessee by the decision of Hon ble Gujarat High Court in the case of General Motors India Pvt. Ltd. (supra). Respectfully following the same, we confirm the order of CIT(A) and this issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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