DCIT Vs Triumph International (India) Private Limited (ITAT Chennai)
The appeal before the ITAT Chennai concerned the Revenue’s challenge to an order of the CIT(A), Chennai-16, for Assessment Year 2018-19 relating to Triumph International (India) Private Limited. The Revenue filed its appeal with a delay of 39 days, explaining through an affidavit that the delay was caused by the time taken to prepare a scrutiny report and obtain comments from the Transfer Pricing Officer. The Tribunal found the reasons adequate and the assessee did not object, leading to condonation of delay.
The sole issue raised by the Revenue concerned the deletion of an addition of Rs. 23,79,08,002 on account of unabsorbed depreciation while computing book profit under Section 115JB. The assessee, a manufacturer and seller of women’s foundation garments, had filed its return declaring nil income after setting off brought-forward losses, and had declared a book loss under Section 115JB. The Assessing Officer, however, recomputed book profit at Rs. 5,40,53,120 and disallowed the assessee’s set-off claim of Rs. 23.79 crore, holding that such losses had already been adjusted in earlier years (AYs 2013-14 to 2015-16) and were no longer available.
The CIT(A) later allowed the assessee’s claim, relying on the Karnataka High Court decision in Bangalore International Airport [2023] 154 taxmann.com 394, which had been upheld by the Supreme Court through dismissal of the Special Leave Petition. The Revenue argued before the Tribunal that the CIT(A)’s view was erroneous, stressing that the Assessing Officer had already allowed the losses in earlier years and that reliance on the Karnataka decision was misplaced. They cited decisions of the Tribunal in Lakshmi Machine Works and the Authority for Advance Rulings in Rashtriya Ispat Nigam Limited, asserting that the mechanism under Section 115JB(2) must be strictly followed.
