2016 (11) TMI 1424 - HC - Income Tax

Set-off of the brought forward unabsorbed depreciation - Held that - As decided in General Motors India Pvt. Ltd. vs. DCIT 2012 (8) TMI 714 - GUJARAT HIGH COURT any unabsorbed depreciation available to an assessee on 1st day of April 2002 (A.Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001, thus once the Circular No.14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from A.Y.1997-98 upto the A.Y.2001-02 got carried forward to the assessment year 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act, 2001 and were available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever. - Decided against revenue

Summary

Issues:
Challenge to Tribunal's order confirming CIT (Appeals) decision on unabsorbed depreciation carry forward.

Analysis:
The appellant appealed against the Tribunal's decision confirming the CIT (Appeals) order regarding the allowance of unabsorbed depreciation carry forward. The appellant raised two substantial questions of law related to the ITAT's direction on the unabsorbed depreciation amount against subsequent years' profits and against the income determined in a specific order. The appellant argued that both authorities erred in reversing the AO's findings, emphasizing the circular and assessment process. However, after reviewing the CIT (Appeals) and ITAT orders, the court relied on decisions from various High Courts, including General Motors India Pvt. Ltd. Vs. DCIT and Ausom Enterprises Ltd. Vs. DCIT, along with a Bombay High Court decision.

The Tribunal, based on the concurrent findings and legal precedents, concluded that the judgments cited by the CIT (Appeals) were applicable in the present case. Therefore, the Tribunal upheld the CIT (Appeals) decision, rejecting the revenue's grounds of appeal. As no substantial question of law emerged due to the concurrent findings, the court dismissed the appeal, considering it devoid of merit.