9911796707
|
Home
Issues:
1. Interpretation of the deduction under section 80J of the Income-tax Act, 1961. 2. Whether unabsorbed depreciation should be deducted for working out the written down value for the purpose of allowing deduction under section 80J. Detailed Analysis: The judgment delivered by the High Court of Madhya Pradesh involved a dispute regarding the interpretation of the deduction provisions under section 80J of the Income-tax Act, 1961. The case revolved around the question of whether unabsorbed depreciation should be considered for calculating the written down value for the purpose of allowing a deduction under section 80J. The Tribunal initially held that unabsorbed depreciation should not be deducted, leading to the Revenue seeking a reference of the question to the High Court for clarification. The High Court analyzed the relevant provisions of section 80J to determine the capital employed in an industrial undertaking or business eligible for the deduction. It noted that the written down value of assets entitled to depreciation is a crucial factor in this calculation. The court highlighted that Explanation 3 to section 43(6) of the Act defines the written down value and includes unabsorbed depreciation carried forward under section 32 as part of the depreciation actually allowed for the purpose of determining the written down value. The Court further examined the Tribunal's reliance on a judgment of the Calcutta High Court, which held that unabsorbed depreciation should not be considered for calculating the written down value under section 80J. However, the High Court disagreed with this interpretation, emphasizing that section 80J explicitly refers to section 43(6) and Explanation 3 for determining the written down value. Therefore, the Court concluded that unabsorbed depreciation must be taken into account when calculating the written down value for the purpose of allowing a deduction under section 80J. Ultimately, the High Court ruled in favor of the Revenue, stating that the Tribunal was incorrect in holding that unabsorbed depreciation should not be deducted for working out the written down value under section 80J. The Court clarified that its decision did not address the applicability of certain sub-clauses to section 80J concerning unabsorbed depreciation, as it was not part of the question referred for its opinion. In conclusion, the judgment provided a detailed analysis of the relevant provisions of the Income-tax Act, highlighting the importance of considering unabsorbed depreciation when calculating the written down value for the purpose of claiming a deduction under section 80J. The ruling clarified the correct interpretation of the law in this context, resolving the dispute raised in the case.
|
