2012 (6) TMI 802 - AT - Income Tax

Summary

Issues involved: Appeal by Revenue against Commissioner of Income-tax(Appeals) orders for assessment year 2007-08 u/s 143(3) of the Income-tax Act, 1961 regarding allowing carried forward depreciation and/or loss of earlier years pertaining to windmills.

Summary:

Issue 1: Carried forward depreciation and/or loss of earlier years

The Revenue contended that the Commissioner of Income tax(Appeals) erred in directing the assessing authority to allow the carried forward depreciation and/or loss of earlier years pertaining to windmills, if not notional. They cited the decision of the Hon'ble Madras High Court in Velayudhaswamy Spinning Mills case and the orders of the Income-tax Appellate Tribunal in group cases as not final. However, the Income-tax Appellate Tribunal, D-Bench, Chennai, in the assessees' own group cases, held that once set off of depreciation/loss occurred in earlier years against other income, the Revenue cannot rework the set off amount notionally. The Tribunal found support in the judgment of the Hon'ble Madras High Court in Velayudhaswamy Spinning Mills case (231 CTR 368) and upheld the Commissioner of Income-tax(Appeals) orders as legally sound. Consequently, the appeals were dismissed, affirming the lower authority's decision.

End of Summary