R.K.DESHPANDE,J. - (1.) One Modern Stramit (I) Ltd., a sick company, was closed down by the end of the year 1986. It was referred to the Board for Industrial and Financial Reconstruction (BIFR) on 30-9-1989 under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). A scheme for rehabilitation in respect of it, was prepared under Section 19 of SICA and a proposal for its amalgamation in the assessee-M/s. Ballarpur Industries Ltd. (BILT) was accepted and accordingly, the amalgamation took place with effect from 1-4-1991.
(2.) The statement of unabsorbed business loss, depreciation, etc., as on 31-3-1991 of the erstwhile Modern Stramit (I) Ltd. (amalgamating company) prepared was as under : JUDGEMENT_7_LAWS(BOM)9_2017.html The claim of the assessee was for written down value of Rs.1,20,03,557/- of the assets of the amalgamating company and the consequent claim was for depreciation of Rs.27,09,294/- for the Assessment Year 1992-93. The Assessing Officer allowed the claim of depreciation to the extent of Rs.3,52,290/- and rest of the claim for depreciation was rejected by the assessment order dated 24-2-1995. The Commissioner of Income Tax (Appeals), Nagpur (CIT) maintained this decision on 26-2-1996 and the Income Tax Appellate Tribunal, Nagpur Bench also confirmed it on 30-9-2002. Hence, both these Income Tax Appeals No.27 and 135 of 2003 arise out of the proceedings for the Assessment Years 1992-93 and 1993-94, against these decisions of the Tribunal and the authorities below. It is an admitted position and conceded by the parties that questions (I) to (III) on which the appeals were admitted are covered in favour of the Revenue and against the appellant by judgment and order dated 1-8-2017 passed by this Court in I.T.R. No.11 of 2002. Accordingly, we answer questions (I) to (III) in favour of the Revenue.
(3.) In these appeals, we are required to decide the following questions of law framed by this Court on 18-6-2007 : Whether Income Tax Appellate Tribunal erred in confirming the disallowance of depreciation amounting to Rs.27,09,294/- in respect of assets of M/s Modern Stramit (I) Limited, a company amalgamated with the appellant company in terms of the order of BIFR V) Whether the Income-tax Appellate Tribunal erred in confirming the disallowance of depreciation on the value of assets of the amalgamating company not actually allowed under Section 32 read with Section 43(6) and Section 72A of the Income-tax Act, 1961 VI) Without prejudice to ground no. (iv) and (v) above whether the Tribunal erred in not allowing the benefit of unabsorbed depreciation despite the fact that provision of section 72A of the Income-tax Act, 1061 read with Sections 18 and 32(2) of the Sick Industrial Companies (Special Provision) act, 1985 have been complied with " ;