9911796707
TMI Blog1989 (12) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... ls relate to same year, they are being disposed of by this common order. 2. The brief facts relating to the aforesaid appeals are as under : The aforesaid association runs a spinning mill. During the year under consideration a return of income showing its gross total income at Rs. 26,54,423 and after deductions available under Chapter VI-A its net income was shown at Rs. 20,02,235. One of the deductions claimed by the assessee was in respect of carry forward of deduction u/s. 80J which was determined as eligible for being carried forward at Rs. 6,13,836 in the assessment order for A.Y. 1974-75. The carry forward in respect of aforesaid amount of unabsorbed deduction u/s. 80J of A.Y. 1974-75 was disallowed in view of the provisions cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions contained in section 80J(3) is a provision of unusual nature which provides that in no case such deficiency or any part thereof be carried forward beyond the seventh assessment year as reckoned from the end of the initial assessment year. He submitted that a provision like this would be that deficiency of the seventh assessment year from the end of initial year is thus not even eligible to be carried forward to the next year. Such an interpretation was commonly unknown to the persons dealing with taxation work. Mr. J.P. Shah, the learned counsel for the assessee told that he himself knew about such a provision only recently when an occasion came to conduct such a case. He further submitted that the assessee under such bona fide bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot attract penal provisions relating to short payment of advance tax etc. He further submitted that the assessee had also made bona fide mistakes to their own detriment. He invited our attention towards assessment order for A.Y. 1970-71 in which the unabsorbed depreciation eligible to be carried forward in subsequent years was determined by the ITO at Rs. 8,37,978. In A.Y. 1979-80 the ITO has mentioned that claim of unabsorbed depreciation pertaining to A.Y. 1970-71 is barred by limitation of time as eight years has expired. Such observations made by the ITO in the assessment order for A.Y. 1979-80 is apparently contradictory to the provisions of law, as there is no limitation of time to carry forward of unabsorbed depreciation of past ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad agreed to the additions in the declared income. In the instant case also the assessee has accepted the order passed by the IAC u/s. 144B in respect of aforesaid disallowance. He further submitted that penal provisions are both preventive and punitive and the CIT(A) was fully justified in sustaining both the aforesaid penalties. It was also contended that ignorance of law is no excuse. The assessee is an old assessee and is assisted by qualified CAs and therefore such an apparent incorrect claim of unabsorbed deduction u/s. 80J clearly amounts furnishing of inaccurate particulars of income. He submitted that the penalties imposed upon the assessee should be confirmed. 4. In the rejoinder the learned counsel for the assessee invited our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income for A.Y. 1980-81 shows that the assessee's total income was shown at nil amount and thereafter the assessee has given complete details of the unabsorbed amount of depreciation, development rebate, deduction u/s. 80J and investment allowance pertaining to A.Ys 1972-73 to 1979-80. In this chart the unabsorbed amount of deduction u/s. 80J pertaining to A.Y. 1974-75 amounting to Rs. 6,13,836 has also been mentioned. It is thus evident that the assessee was under a bonafide belief that the aforesaid amount of deficiency allowable u/s. 80J pertaining to A.Y. 1974-75 is eligible to be carried forward in A.Y. 1980-81. Since there was no positive income in A.Y. 1980-81 the claim of such carry forward was mentioned by way of a note below the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d depreciation in respect of A.Y. 1970-71 is barred by time limit of 8 years and hence not allowed. This is apparently an incorrect observation made by the ITO as there is no time limit for claiming unabsorbed depreciation in subsequent years. The assessee could validly claim deduction in respect of such unabsorbed depreciation of A.Y. 1970-71 and this would have resulted in reduction of the assessed income by an amount of Rs. 3,37,978 in the year under appeal. This mistake, which is detrimental to the assessee's interest further proves the absence of any guilty intention on the part of the assessee. The Hon'ble Supreme Court in the case of Sir Shadilal Sugar General Mills Ltd. have clearly held that by agreeing to the additions, it does ..... X X X X Extracts X X X X X X X X Extracts X X X X
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