The Tax Publishers2020 TaxPub(DT) 3636 (Pune-Trib) INCOME TAX ACT, 1961
Section 154
Where AO categorically observed that as per records there was no brought forward loss available for set-off against the current year's income and such a finding was not controverted by assessee, therefore, amount of set-off of brought forward loss claimed by assessee in its return which was wrongfully allowed in the original assessment, was not admissible and was rightly rectified under section 154 and accordingly, appeal of assessee was partly allowed.
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Rectification under section 154 - Unabsorbed depreciation - As per AO, no brought forward loss available for set off against current year's income -
Assessee declared total income after setting off unabsorbed depreciation and scrutiny assessment was completed. Before initiating proceedings under section 154, AO observed that in the original assessment proceedings, assessee claimed set off of unabsorbed depreciation pertaining to assessment year 1997-98 and 1998-99, which was allowed despite observations that the assessee would be allowed set off of unabsorbed depreciation after verification, which exercise was not carried out. AO observed that unabsorbed depreciation pertaining to assessment years 1997-98 and 1998-99 was not eligible for carry forward and set off after a period of 8 years in terms of section 32(2). After considering the objections of assessee, AO observed that there were no brought forward losses available for set off against current year's income and hence, assessee wrongly claimed such a set off, which deserved to be disallowed Held: High Court in General Motors India P.Ltd. V. DCIT [(2013) 354 ITR 244 (Guj) : 2013 TaxPub(DT) 0624 (Guj-HC)] had held that any unabsorbed depreciation available to an assessee as on 01-04-2002, namely, assessment year 2002-03, would be dealt with in accordance with the provisions of section 32(2) as amended by the Finance Act, 2001 and not by the provisions of section 32(2) as stood amended. As regards the claim of the assessee for set off of brought forward losses, which was set off by the assessee and rectified by AO in his order under section 154, AO categorically observed that as per records there was no brought forward loss available for set off against the current year's income. Such a finding was not controverted by assessee. Therefore, amount of set off of brought forward loss claimed by assessee in its return which was wrongfully allowed in the original assessment, was not admissible and was rightly rectified under section 154.
Followed:CIT v. Gujarat Themis Biosyn Ltd. (2014) 105 DTR 72 (Guj.) : 2014 TaxPub(DT) 2213 (Guj-HC) General Motors India Pvt. Ltd. v. DCIT (2013) 354 ITR 244 (Guj) : 2013 TaxPub(DT) 0624 (Guj-HC)
REFERRED :
FAVOUR : Partly in assessee's favour
A.Y. : 2008-09
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