TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 807
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....facts has confirmed the rejection of the claim of set off of brought forward unabsorbed depreciation of earlier years on the ground that there is no brought forward unabsorbed depreciation at all. 2.0 The learned Commissioner of Income Tax (Appeals) erred in law and on facts has dismissed the ground relating to the initiation of penalty proceedings under section 271(1) (c) of the IT Act. 3.0 The learned Commissioner of Income Tax (Appeals) has erred in law and on facts in confirming the charging of interest under section 234B, 234C and 234D of the Income Tax Act, 1961." 3. It was contended that the facts leading to the disallowance of set off of unabsorbed depreciation was identical in all the cases. Therefore, we shall be dealing with the facts in the Asst. Year 2006- 07 and our decision rendered therein will apply mutatis mutandis to all the appeals. Drawing our attention to the facts of the case, the ld. counsel for the assessee pointed out that the present appeal has come up in second round; that in the first round the brought-forward unabsorbed depreciation from earlier years was denied to be setoff in the current year for the reason that the assessee had no business ....
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.... before we can answer the question concerned in this appeal is whether it is necessary that in the following year the assessee must carry on business, i.e., some or other business, to avail of the benefit of the said sub- section? Two views are possible in this behalf, viz., (1) since the sub- section speaks of unabsorbed depreciation being carried forward to the next year and "added to the amount of the allowance for depreciation for the following previous year and deemed to be part of that allowance" the sub- section necessarily contemplates existence of a business in the following year, and (2) inasmuch as the sub-section not only speaks of adding the unabsorbed depreciation to the depreciation allowance allowed in the following year but also says that in the absence of such allowance, the carried forward depreciation allowance shall be the allowance for that year, it means that in the following year the assessee need not carry on any business or profession for availing of the benefit of sub-section (2) of section 32. We are inclined to adopt the second of the above two views having regard to the decisions of this Court in Jaipuria China Clay Mines (P.) Ltd.'s case (1966) 59....
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....restored the issue of claim of depreciation to the file of the AO for decision afresh after verifying the details furnished by the assessee in this regard. Our attention was drawn to order passed by the ITAT in MA no.130 to 133/Ahd/2014 dated 21.9.2015 at para 2-3 of the order as under: "2. At the outset, ld. Counsel for the assessee submitted that although the Tribunal accepted the contention of the assessee that the assessee is entitled for the depreciation in view of the judgment of Hon'ble Apex Court rendered in case of CIT vs. Virmani Industries Pvt. Ltd. (1995) 216 ITR 0607 (SC), having accepted the contention, however, the Tribunal has observed that it is not coming out of the records that from the order which depreciation was being carried forward by the assessee and why the assessee has accepted the decision of Id. CIT(A) in A.Y. 2004-05 since no ground against the rejection of the claim raised by the assessee before the Tribunal. Ld. Counsel submitted that assessee is entitled for depreciation. This can be verified by the Assessing Officer. On the contrary, Id. Sr. D.R. submitted that assessee has not pointed out any specific mistake into the order of Tribunal. Ther....
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....rs accounts. Thus, the ratio decided in the cases of M/s Virmani Pvt. Ltd and M/s Estate 85 Finance Ltd are not applicable in assessee's case." 6. The ld. counsel for the assessee thereafter pointed out in Asst. Year 2004-05, assessee's claim of set off of brought-forward unabsorbed depreciation was allowed by the ITAT in the second round before it in Revenues appeal in ITA No.1465/Ahd/2017 vide order dated 27.11.2019 along with Revenues appeal for Asst. Year 2009-10, 2011-12 & 2012-13 in a combined order. Copy of the order was placed before us, and it was pointed out that following the decision of Hon'ble Apex Court in the case of CIT Vs. Virmani Industries P. Ltd. (pra) and the decision of Hon'ble Gujarat High Court in the case of General Motors India P. Ltd. Vs. DCIT, 354 ITR 244 (Guj), the assessee's claim for carry forwarded of unabsorbed depreciation was allowed, to be set off against income from other sources. Our attention was drawn to the relevant finding of the ITAT as under: We find that the order of the CIT(A) is inconsonance with the decision of the Hon'ble Supreme Court in the case of CIT vs. Virmani Industries Pvt. Ltd. (1995) 215 ITR 60 (SC) and the deci....
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....no business activity being carried out by the appellant in a particular year, however, he would be entitled to set off of carry forward depreciation from earlier years. At para 2 of the order, the Hon'ble ITAT has clearly observed that "it is not coming out of record" that which depreciation was being carried forward by the appellant and why the appellant has accepted the decision of the Ld. CIT(A) for AY 2004-05 since, no ground was raised before ITAT against rejection of said claim. Ld. Counsel reiterated that the appellant is entitled for depreciation and that can be verified by AO. Hence, the matter was set aside before the AO. 8.1. While going through the assessment order u/s 143(3) rws 254 dated 21.04.2016 for the AY 2006-07, I find that appellant has filed submission on 19.02.2016 against notice u/s 142(1) dated 12.02.2016 and the same is reproduced at Para 2.2 of the order. According to the appellant's submission, claim of unabsorbed depreciation in tabular data is as under: Asst. Year Unabsorbed Depreciation 1992-93 1367.82 1993-94 1321.41 1993-94 193.37 1995-96 917.48 1996-97 4133.97 1997-98 5637.53 1998-99 2345.97 1999-00 4377.36 200....