TaxTMI 
TaxTMI 
2015 (1) TMI 1268
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.... allowable beyond 8 years or not is a debatable/disputed issue and therefore cannot be the criteria for revision of assessment framed u/s.143(3) of the I.T. Act. 2.1 However, the Ld.CIT was not satisfied with the explanation given by the assessee. He held that the AO without any application of mind has allowed excess set off of depreciation amounting to Rs. 87,08,64,394/-. Therefore, the assessment order is erroneous as well as prejudicial to the interest of the revenue. He, therefore, setaside the issue to the file of the AO with a direction to pass the order afresh after giving due opportunity of being heard to the assessee. The relevant observation of the Ld. CIT at paras 4.1 to 4.4 of the order read as under : "4.1 I have gone thr....
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.... 2004-05 only. It is clear that the Assessing Officer has not applied his mind and has allowed the set off of unabsorbed depreciation amounting to Rs. 87,08,64,394/- pertaining to A.Y. 1974-75 to A.Y. 1996-97 in the assessment order passed for the year under consideration. The assessment order passed by the Assessing Officer on this issue is clearly erroneous and prejudicial to the interest of revenue for non application of mind. 4.3 It is established law that revisional jurisdiction u/s 263 can be exercised for lack of inquiry where inquiry is prima facie arranted. This law was followed by Special Bench of the Tribunal by Special Bench of the Tribunal in Rajalaxmi Mills Ltd. vs. ITO 313 ITR (80), 182(Chennai) as regards the provision of....
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....ed in 198 ITR 144(GUJ), where it is held by the Gujarat High Court that, the CIT is entitled to revise the erroneous and prejudicial order passed by ITO even in a case where issue was debatable. 4.4 The Assessing Officer has thus without any application of mind allowed excess set off of depreciation amounting to Rs. 87,08,64,394/-. The assessment order framed is clearly erroneous and prejudicial to the interest of revenue on this issue and it is thus set aside. Subject to the above discussion, the assessment order passed by the A.O is set aside to be passed afresh, after giving an opportunity to the assessee of being heard." 3. Aggrieved with such order of the CIT the assessee is in appeal before us with the following grounds : "On....
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.... attention of the Bench to the carried forward losses as determined by the AO which is as under : A.Y. Business loss Depreciation loss Total 1974-75 to 1999-00 -- 103,40,20,296 103,40,20,296 2005-2006 -- 8,77,94,554 8,77,94,554 2006-2007 5,07,23,877 4,64,07,974 9,71,31,851 He submitted that the AO based on the order passed u/s.143(3) for the preceding assessment year has given the set off of brought forward losses of earlier year. Therefore, mistake, if any has occurred in the order of the preceding assessment year and not in this year. He submitted that although no specific question was raised by the AO on this issue, however, the fact remains that an order in the preceding ass....
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....7,08,64,394/- for A.Y. 2007-08. According to Ld. CIT, the unabsorbed depreciation pertaining to the A.Yrs. 1974-75 to 1996-97 cannot be carried forward more than 8 years, i.e. beyond A.Y. 2004-05 in this case. We find the order u/s.143(3) has been passed for A.Y. 2006-07 determining the unabsorbed depreciation and business loss that has to be carried forward the details of which are already given at para 4 of the impugned order. Therefore, the mistake, if any, has crept in the order for A.Y. 2006-07 and certainly not in the order for A.Y. 2007- 08. The AO has simply followed the order of his predecessor giving effect to the quantum of brought forward loss to be set off from the income of the current year. Therefore, the order for the impugn....