TaxTMI 
TaxTMI 
2024 (7) TMI 1129
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....this action of ld. Pr. CIT the appellant is before us with as many as five grounds of appeal which are as under: "1. That on the facts and in the circumstances of the case and law, the order passed by the Ld. Pr. CIT under section 263 of the Income-tax Act, 1961 ('IT Act') is illegal, invalid and not sustainable in law. 2. For that on the facts and in the circumstances of the case and in law the Ld. PCIT erred in holding that the assessment order passed u/s 143(3) dated 22.04.2021 as erroneous and prejudicial to the interest of the revenue and setting aside the order with direction to the AO to make necessary verification / enquiry. 3. On the facts and in the circumstances of the case and in law the Ld. PCIT erred not considering to submissions of the assessee that the provision of Sec. 79 is applicable to unabsorbed brought forward business loss and not to unabsorbed brought forward depreciation and after considering the unabsorbed brought forward depreciation of Rs. 8,42,47,107/- there is no income remaining on which tax is payable by the assessee. 4. On the facts and in the circumstances of the case and in law the order of the PCIT u/s 263 of the Act is passed in....
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....entioned as under: "In response to the 263 notice it is submitted before the PCIT that in the impugned assessment year, the assessee company has brought forward business loss as well as unabsorbed brought forward depreciation for the A.Y. 2012-13 to 2018-19 is available for set off with the income of the subsequent years, the details of which are given below. S. No A. Y. Business Loss Amount in Rs. Unabsorbed Depreciation Amount in Rs. Total Return Loss Amount in Rs. 1. 2012-13 - 74,63,316 - 2. 2013-14 - 1,06,93,739 - 3. 2014-15 5,81,48,184 1,71,49,460 7,52,97,644 4. 2015-16 2,95,86,640 1,50,36,520 4,46,23,160 5. 2016-17 4,93,38,813 1,29,38,416 6,22,77,229 6. 2017-18 6,58,026 1,12,20,575 1,18,78,601 7. 2018-19 27,84,126 97,45,081 1,25,29,207 Total 14,05,15,789 8,42,47,107 20,66,05,841 The same is verifiable from the Return of Income and Tax Audit Report of A.Y. 2013-14, 2014-15 & 2015-16 as well as from Tax Audit Report of A.Y. 2019-20. (Copy enclosed) It was submitted that section 79 provides that set off of business loss brought forward from earlier years is not allowable in the year of change in shar....
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....in which s. 79 occurs, it is obvious that the contention urged on behalf of the Revenue that the provisions of s. 79 apply to unabsorbed depreciation allowance which has been carried forward or to unabsorbed development rebate which has been carried forward from the immediately preceding assessment year, must be rejected. In our opinion, on a pure grammatical construction, in view of the reference to the chapter, incurring of losses and in view of the fact that s. 79 forms part of the whole scheme adumbrated from s. 72 onwards, this contention urged on behalf of the Revenue must be rejected." (Copy of order enclosed) The above-cited judgment was followed by the Kolkata Bench of the ITAT in the case of DCIT, Cir-12(2), Kolkata Vs. P.N. Memorial Neuro Centre & Research Ltd in ITA No. 1383/Kol/2015 Order dated 13.09.2019 reported in 2019 (9) TMI 684. (Copy of Order enclosed)." 2.1. To summarise the contentions of the ld. A/R it deserves to be mentioned that he has relied on the authority of a Coordinate Bench order in the case of P.N. Memorial Neuro Centre & Research Ltd. (supra) in ITA No. 1383/KOL/2015 order dated 13.09.2019. More importantly he has relied on the case of CIT vs. ....
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....fty one percent of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than fifty one percent of the voting power on the last day of the year or years in which the loss was incurred: Provided that nothing contained in this voting power takes place in a previous year consequent upon the death of a shareholder or on account of transfer of shares by way of gift to any relative of the shareholder making such gift. Provided further that nothing contained in this section shall apply to any change in the shareholding of an Indian company which is a subsidiary of a foreign company as a result of amalgamation or demerger of a foreign company subject to the condition that fifty one percent shareholders of the amalgamating or demerged foreign company continue to be the shareholders of the amalgamated or the resulting foreign company." It was submitted that if 51 % of the shareholder continues to be the same in the year in which the loss was incurred and in the year of set off then the loss is be allowed set off. It was submitted that the loss being depreciation loss was for the assessment year 2009-10 when more than 51% of the....