2017 (4) TMI 171

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....peal relating to AY 2008-09. The assessee was engaged in the business of manufacture and sale of rolled/forged rings for bearings. The issue contested in AY 2008-09 relates to the assessment of Rs. 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 c....

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....above said decision of Hon'ble Bombay High Court will not apply to the instant case. He further relied upon various case laws 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 asse....

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.... the provisions then existing, the unabsorbed depreciation relating to AY 2000-01 can be carried forward for eight succeeding 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 Rs. 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),....

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.... in the assessment years 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 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 va....