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Issues involved: Appeal against order confirming set off of unabsorbed depreciation from current business profits and denial of deduction u/s 10B of the Act.
Confirmation of set off of unabsorbed depreciation: The AO observed unabsorbed loss on depreciation from A.Y. 2008-09 not set off before claiming deduction u/s 10B. Assessee cited Hon'ble Karnataka High Court's decision in favor, but AO relied on Hon'ble Kerala High Court's decision against. CIT(A) upheld AO's action, considering various case laws. Assessee appealed to Tribunal, reiterating arguments. Tribunal noted Hon'ble Bombay High Court's decision favoring assessee, allowing deduction u/s 10B without setting off brought forward depreciation against current year's income. Tribunal followed Hon'ble Bombay, Karnataka, and Delhi High Courts' decisions, allowing the issue in favor of the assessee. Denial of deduction u/s 10B: Assessee claimed deduction u/s 10B, but AO set off unabsorbed depreciation against business profits before granting exemption. CIT(A) confirmed AO's action, citing various Tribunal decisions against the assessee. Assessee argued before Tribunal, referencing Hon'ble Karnataka High Court's decision and Hon'ble Delhi High Court's recent decision in favor. Tribunal considered all orders and decisions, including Hon'ble Bombay High Court's ruling, and held that brought forward depreciation cannot be set off against current year's income for exemption u/s 10B. Tribunal allowed the issue in favor of the assessee, directing AO to grant deduction u/s 10B as claimed. Separate Judgement by Judge: No separate judgment delivered by the judges.
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