AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (10) TMI 1264
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....ls) has erred in rejecting the assessee's claim of adjustment of unabsorbed depreciation on the ground that the returns filed for assessment year 2002-03, 2004-05, 2005-06 were not filed on due dates of the return. 5) The learned Commissioner of Income Tax (Appeals) has erred in considering the amount of unabsorbed depreciation of A. Y. 2001-02 at Rs. 33,03,519/- instead of Rs. 6,74,728/-. 6) The Appellant craves to add, alter, delete or modify any ground of appeal during the course of the appellate proceedings. 2. At the very outset, our attention was drawn to the fact that the present appeal is prima facie barred by 1 day delay. Considering the negligible period of delay and keeping in view the principles laid down by Hon'ble Supreme Court in case of "Land Acquisition Collector Vrs. MstKitzi, AIR 1987 S.C. 1353/(1987) 167 ITR 471 (SC), we condone the delay of 1 day in filing the appeal and admit the same to be heard on merits. 3. The brief facts of the case are that the assessee is a Private Limited Company, claimed to be engaged in the business of engineering activity. The return of income was filed by the assessee on 30.09.2009 declaring income ofRs 1,28,560/-. Thereafte....
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....actory building and other assets, the deed executor must have incorporated the same in the sale deed, hence the claim of the appellant is not tenable. 4.5 In the schedule of fixed assets, copy filed without authentication of auditors, reflect the value of factory building at Rs. 17.20 lakhs, electric installation at Rs. 11.27 lakhs, furniture at Rs. 0.29 lakhs and tool and equipments at Rs. 1.35 lakhs, as on 01.04.2010, totaling around Rs. 30 lakhs, claimed to had been sold along with the plot of the factory, without any consideration, not so reflected in the sale deed, is not believable. It is further noticed that the appellant had sold its assets in F Yr 2003-04 and accordingly shown loss on sale of fixed assets at Rs. 6,83,715/-. Accordingly the appellant was required to furnish year-wise details of business activities, depreciation claimed, WDV worked out, for the last ten years to establish the depreciated value of above assets, brought forward in the relevant year in compliance, the Ld AR could not furnish the same, in the required format. In view of these facts, the appellant has clearly failed to establish the working of claim of loss against above assets, if any. The a....
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....ipment or furniture were not separately fetched by the assessee but the same is forming part of the aforesaid consideration. Secondly, these assets were not required by the assessee and therefore, they were given along with the land. It was also submitted that the WDV of the aforesaid asset as on the first day of the accounting period i.e. 01.04.08, which was discarded by the assessee were claimed as Short- term Capital Loss. It was also submitted that the Deed of Conveyance refers to House, OutHouse, Edifice, Building, Courtyards, Drains, Compound, etc. having been sold along with the land. Therefore, the factory building which was constructed on the said land and electric installation, equipment, furniture, etc. were given along with the land for the lump sum consideration of Rs. 60,00,000/- which included scrap value of the building, electrical installation, equipment and furniture lying therein. It was also submitted that the said short term capital loss being the written down value of these assets of Rs. 6,85,490/- may be allowed and the same may be adjusted against the Long term capital gains on sale of the land. Our attention was also drawn towards paper book at page no.....
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....AO disallowed the set off of unabsorbed depreciation for the earlier years aggregating to Rs. 46,29,650/- against the Long term capital gain earned by the assessee company on the sale of land on account of various reasons. Ld. CIT(A) also confirmed the order of AO and the reasoning is contained in para no. 5.5 & 5.6 of its order. Ld. AR submitted before us that AO wrongly disallowed that the set off unabsorbed depreciation by wrongly interpreting the provision of section 72(1)(i) of the I.T. Act by holding that if there is no activities in the year of claim, then the brought forward losses cannot be allowed to be set off. In this respect, it was submitted by Ld. AR that assessee company is claiming carried forward and set off of unabsorbed depreciation of the earlier years and not carried forward and set off of unabsorbed business loss of the earlier years and hence sec.72(1) of the Act has no application. In this respect, Ld. AR drawn our attention to the decision of theMumbai Tribunal in the case of Suresh Industries vs. ACIT 1(2012) 27 taxmann.com 203)] wherein the Hon'ble Tribunal for A.Y.2007-08 held asunder: "10. A comparative study of pre-amendment and post amendment....
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....) of Sec. 35, to be carried forward, effect shall first be given to the provisions of this section. "13. A simple reading of this section suggests that in case of set off of business loss vis-a-vis depreciation, the first preference shall be given to the business loss as per the provisions of Sec. 72(1) of the Act for the simple reason that the business loss can be carried forward onlyupto 8 assessment years whereas the depreciation can be carried over upto unlimited period. As has been discussed hereinabove, the brought forward unabsorbed depreciation is treated as current years' depreciation because of the legal fiction, therefore the treatment given to the current year's depreciation is equally applicable to brought forward depreciation after the application of Finance Act, 2001. "14. We have already held that current year's depreciation is to be allowed as set off from the Long Term Capital Gains and brought forward depreciation is to be treated as current year's depreciation as per the legal fiction of section 32(2), the same is also to be allowed to be set off from the Long Term Capital Gains. Accordingly, ground No. 2 of the appeal is also allowed." It w....