Sun Pharmaceuticals Industries ... vs Dcit on 19 August, 2016

[Cites 4, Cited by 20]

Gujarat High Court

Sun Pharmaceuticals Industries ... vs Dcit on 19 August, 2016

Author: Ks Jhaveri

Bench: Ks Jhaveri, G.R.Udhwani

                  O/TAXAP/652/2015                                                JUDGMENT




                    IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                     TAX APPEAL NO. 652 of 2015



         FOR APPROVAL AND SIGNATURE:



         HONOURABLE MR.JUSTICE KS JHAVERI                                        SD/-


         and
         HONOURABLE MR.JUSTICE G.R.UDHWANI                                       SD/-

         ==========================================================

         1     Whether Reporters of Local Papers may be allowed                            YES
               to see the judgment ?

         2     To be referred to the Reporter or not ?                                      NO

         3     Whether their Lordships wish to see the fair copy of                         NO
               the judgment ?

         4     Whether this case involves a substantial question of                         NO
               law as to the interpretation of the Constitution of
               India or any order made thereunder ?

         ==========================================================
                SUN PHARMACEUTICALS INDUSTRIES LIMITED....Appellant(s)
                                      Versus
                        DCIT, CENTRAL CIRCLE 1....Opponent(s)
         ==========================================================
         Appearance:
         MR B S SOPARKAR, ADVOCATE for the Appellant(s) No. 1
         MR KM PARIKH, ADVOCATE for the Opponent(s) No. 1
         ==========================================================

             CORAM: HONOURABLE MR.JUSTICE KS JHAVERI
                    and
                    HONOURABLE MR.JUSTICE G.R.UDHWANI

                                          Date : 19/08/2016


                                               Page 1 of 4

HC-NIC                                      Page 1 of 4      Created On Tue Aug 23 02:28:40 IST 2016
                 O/TAXAP/652/2015                                           JUDGMENT




                                   ORAL JUDGMENT

(PER : HONOURABLE MR.JUSTICE KS JHAVERI) By way of this appeal, the appellant assessee has challenged the order passed by the ITAT in ITA No.3289/Ahd/2003 dated 26/03/2015 for the assessment year 200102 and came to be admitted on the following question of law:

"Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified on facts in not allowing the reduction of book profit under section 115JB for brought forward losses or unabsorbed depreciation, whichever is lower of amalgamating company (Pradeep Drug Company Limited) amounting to Rs.3,39,12,399/- in the hands of the appellant under the provisions of explanation 1(iii) to section 115JB(2) of the Income Tax Act, 1961?"

2. Learned Counsel for the appellantassessee has contended that the tribunal has committed an error of law and facts in not allowing the reduction of book profit under Section 115 JB for brought forward losses or unabsorbed depreciation of amalgamating company (Pradeep Drug Company Limited) amounting to Rs.3,39,12,399/. He has further contended that the view taken by the AO and other authorities are required to be reversed.

3. On the other hand, learned Counsel for the department has contended that in view of the observations made by the tribunal in its order at Page 2 of 4 HC-NIC Page 2 of 4 Created On Tue Aug 23 02:28:40 IST 2016 O/TAXAP/652/2015 JUDGMENT paragraph No.3.2, this Court may not interfere with the said findings and appeal may be dismissed, which reads thus:

"3.2 WE have heard both the sides. At the outset, we have been informed that this issue has not been raised in the past in A.Y. 199900 and 200001. We have also been informed that the Assessee has moved an application u/s. 154 of IT Act. However that too was decided against the Assessee. We have examined the facts as narrated above. One of the important finding of the AO is that after the merger was completed there was no amount of brought forward loss and unabsorbed depreciation remained for adjustment. This finding of the AO has not been controverted by the Assessee. It appears that due to the substantial reserves available at the time of merger it was decided by the amalgamating company and the amalgamated company not to set off such losses or depreciation. Further, the position is that as per Explanation 1(iii) of Section 115JB the "book profit" is to be reduced by the amount of loss brought forward or unabsorbed depreciation but the provision of this clause shall not apply if the amount of loss brought forward or unabsorbed depreciation as "Nil". The Assessee has not controverted this fact as noted by the AO that after the amalgamation there was "Nil" amount of brought forward loss and unabsorbed depreciation. Due to this reason, we are of the view that the Assessee has made a wrong claim which was rightly rejected by the AO. Resultantly, we find no force in this Page 3 of 4 HC-NIC Page 3 of 4 Created On Tue Aug 23 02:28:40 IST 2016 O/TAXAP/652/2015 JUDGMENT ground of the Assessee, hence dismissed."

4. Having heard the learned Counsel for the parties and having gone through the order passed by the tribunal as quoted herein above confirming the order of the CIT (A), this Court does not deem it proper to interfere with the said view taken by the tribunal. We are in complete agreement with the view taken by the tribunal and while adopting the said reasonings, this appeal stands dismissed and question is answered in favour of the department and against the assessee.

(K.S.JHAVERI, J.) (G.R.UDHWANI, J.) sompura Page 4 of 4 HC-NIC Page 4 of 4 Created On Tue Aug 23 02:28:40 IST 2016

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