2006 (4) TMI 89

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....ome-tax Officer for filing of return? (2) Whether, the Appellate Tribunal is right in law and on facts in directing the Income-tax Officer to allow depreciation and investment allowance on the cost of the assets without deducting the amount of subsidy?" For the assessment year 1985-86, the assessee-company filed the return on September 30, 1985 showing loss of Rs. 64,91,746. The Assessing Officer completed the assessment on February 11, 1988, wherein he computed business loss at Rs. 31,95,090 and unabsorbed depreciation at Rs. 29,52,801. The Assessing Officer allowed unabsorbed depreciation to be carried forward, but, with regard to the business loss, he noted that the assessee had applied for extension of time in Form No. 6 for filin....

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....ion No. 1 is concerned, it is not in dispute that the assessee had submitted Form No. 6 on June 26,1985, and had sought time up to September 30, 1985, to enable him to file the return. It is also not in dispute that the return of income was filed by the assessee on September 30,1985, and the assessee had not received till the said date any reply from the Assessing Officer informing the assessee as to whether the request made by the assessee in Form No. 6 was accepted or rejected. In CIT v. Gordhanbhai Jethabhai [1983] 142 ITR 84, the Division Bench of this court has held that when an application for extension of time for furnishing the return is not disposed of by the Income-tax Officer, the assessee would be justified in entertaining a rea....

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.... Under the circumstances, this court is of the opinion that the Appellate Tribunal was right in law and on the facts in directing the Income-tax Officer to allow to carry forward business loss though intimation regarding extension of time to file the return was not given to the assessee. The said question, therefore, will have to be answered in the affirmative, i.e., in favour of the assessee and against the Revenue. In so far as question No. 2 is concerned, this court finds that the same is squarely covered by the decision of the Supreme Court in CIT v. P.J. Chemicals Ltd. [1994] 210 ITR 830. In the said case, after review of the law on the point, the Supreme Court has held as under: "Where Government subsidy is intended as an incent....