Kings Infra Ventures Ltd Vs ACIT (Kerala High Court)
Kerala High Court held that direction of reopening of assessment by appellate authority without any enquiry or without any material is unjustified and untenable in law. Accordingly, appeal allowed.
Facts- During A.Y. 2011-12, the appellant filed its return of income disclosing nil income. While filing the return, the appellant made a claim of Rs.1,52,76,459/-towards carried forward loss, which included depreciation loss of Rs.1,88,52,496/- (Pertaining to A.Y.s 1996-97 to 2009-10) and loss amounting to Rs.35,85,037/- (pertaining to A.Y.s 1996-97 and 1997-98). The total loss of Rs.1,52,76,459/- was adjusted against the taxable income of Rs.35,85,037/- for the A.Y. 2011-12, and thereby the taxable income came to be nil. The claim for carried forward depreciation was based on the claim for depreciation made for the previous A.Y.s 1996-97 to 2009-10 in the returns filed by the appellant for those years. The assessing authority disallowed the set off of loss claimed to the tune of Rs.35,85,037/- and assessed the same to tax for A.Y 2011-12 u/s. 143(3) of the Income Tax Act.
The appellant preferred an appeal before the First Appellate Authority, who partly allowed the appeal, and allowed the set-off claimed in respect of brought forward unabsorbed depreciation pertaining to A.Y.s 1996-97 and 1997-98 against the taxable income relating to A.Y.s 2010-11, 2011-12 and subsequent years. The brought forward unabsorbed depreciation relating to A.Y.s 1998-99 to 2009-2010 was not allowed to be set off against the taxable income relating to A.Y.s 2012-13 onwards. The First Appellate authority further directed the assessing authority to reopen the assessment proceedings for the A.Y. 2010-11 and from 2012-13 onwards to disallow the set off of the claim of unabsorbed depreciation computed from 1998-99 onwards.
