TaxTMI 
TaxTMI 
2013 (11) TMI 1365
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....tanding first purchased and then sold back to the manufacturer and against purchased through its sister concern from whom it has borrowed the same on lease. 2. On the facts and circumstances of the case and in law, the learned CIT (A) erred in granting set off of unabsorbed depreciation against income from capital gain and dividend income. 3. On the facts and circumstances of the case and in law, the learned CIT (A) erred in directing AO to allow the deduction under section 80HHC of Rs.1,23,80,610 while computing the book profit under section 115JB of the Act, inspite of the fact that deduction under section 80HHC computed under clause (a), (b) & (c) of sub section (3) or sub section 3(A) is nil as provided under section 115JB of the Act. 4. On the facts and circumstances of the case and in law, the learned CIT (A) erred in directing AO to recompute the deduction under section 80HHC by taking the turnover of the taxable division only on "standalone" basis and ignoring the turnover of the other division without considering the provision of the section 80AB of the Act which talk about the gross profit of assessee and not of the Division". 2. We have heard the learned DR and the ....
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....ssessee should have conducted his business affairs. It is not in dispute that the transactions were given effect to by the parties. Even if the hunch of the learned CIT(A) that windmill 250 KW was not physically moved is correct the fact remains that ownership of the assessee over the windmill was substituted and the assessee thereafter operated the windmill as a lessee. The authorities below have approached the issue from physical point of view alone. They have not gone into the financial restructuring part of the transactions which too could be an important consideration for the assessee. The assessee has argued before the authorities below that there is no reduction in the assessee's tax liability by the transactions and in fact the assessee stood to gain by the transactions in as much as the assessee received Rs.550 lacs by way of liquidated damages. The case of the Revenue is that all these arrangements might have facilitated reduction of tax liability of the assessee group taken as a whole. The learned counsel for the assessee has rightly argued that the assessment of the assessee cannot be affected by what happened in the case of there assessee even if they were part of the ....
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.... it is clearly mentioned that if the profits of that business were not sufficient to absorb the depreciation allowance of the current year, the said excess allowance could be adjusted against the chargeable income from any other heads of income as mentioned in section 14 of the Act. I find that the issue was settled by the decision of the apex court in the case of CIT vs. Jaipuria China Clay Mines (P) Ltd (1966) 59 ITR 555 (SC) wherein the Hon'ble Supreme Court has held that unabsorbed depreciation of an earlier year could be set off against the income under other heads. The Hon'ble Supreme Court has further observed that the words "no profits or gains chargeable for that year" are not confined to profits and gains derived from the business whose income is being computed under section 10 but they refer to the totality of the profits or gains computed under the various heads and chargeable to tax. The Delhi High Court in the case of Escorts Electronics Ltd vs. CIT (258 ITR 23) also held that brought forward depreciation could be set off against all the heads of income. The Supreme Court in an another decision in the case of Rajapalayam Mills Ltd v. CIT (1978) 115 ITR 777, held that ....
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....CIT in special leave application No.1773 of 2012 dated 23.08.2012. The above Special Bench decision and the Hon'ble Gujarat High Court judgment are in favour of assessee. The Hon'ble Gujarat High Court on the facts on the issue held as under: "37. The CBDT Circular clarifies the intent of the amendment that it is for enabling the industry to conserve sufficient funds to replace plant and machinery and accordingly the amendment dispenses with the restriction of 8 years for carry forward and set off of unabsorbed depreciation. The amendment is applicable from assessment year 2002-03 and subsequent years. This means that any unabsorbed depreciation available to an assessee on 1st day of April, 2002 (A.Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001 and not by the provisions of section 32(2) as it stood before the said amendment. Had the intention of the Legislature been to allow the unabsorbed depreciation allowance worked out in A.Y. 1997-98 only for eight subsequent assessment years even after the amendment of section 32(2) by Finance Act, 2001 it would have incorporated a provision to that effect. However, it does n....
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....t with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001. And once the Circular No.14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from A.Y.1997-98 upto the A.Y.2001-02 got carried forward to the assessment year 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act, 2001 and were available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever". 7. Not only on legal principles, even on facts, contentions of assessee are acceptable. Assessee's unabsorbed depreciation for the assessment year 2001-02 and 2002-03 and current year's depreciation, as held by the CIT (A) are more than the capital gains and dividend being brought to tax separately by AO. In these circumstances both on facts as well as on law, assessee's contentions are allowable. Therefore, we do not see any reason to interfere with the order of the CIT (A). Accordingly the ground is rejected. 8. Ground No.3 pertains to the claim of section 80HHC of Rs.1,23,8....
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....tile Division, Lease and Hire Purchase Division; Power Generation Division, Foreign Exchange Division & Financial and Other Services Division. These activities were distinct and separate from each other. For this purpose the assessee had maintained separate books of account in respect of each division and separate P & L A/s. and separate balance sheet were prepared in respect of each division. For the purpose of annual accounts of the company as a whole the accounts of various divisions were consolidated and a consolidated P & L A/s. and balance-sheet was also prepared. The Assessing Officer had simply adopted the figures appearing in the consolidated account and ignored the separate accounts of Textile Division. In the case of an assessee carrying on more than one business it was only the business of which export was a part was required to be taken into consideration and not other business which had nothing to do with the export business. At our direction the assessee has filed separate balance sheet and P & L A/s. of Textile Division as also audit report in form no.10CCAC. In support of its contentions the learned counsel has relied upon the judgments reported in 245 ITR 49 (Bom)....