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Issues involved: Appeal against dismissal of appeal for A.Y. 2008-09 and 2009-10 regarding the maintainability of the claim for set off of unabsorbed depreciation allowance.
Summary: Issue 1: Maintainability of claim for set off of unabsorbed depreciation allowance The appeals by the Assessee were dismissed for A.Y. 2008-09 and 2009-10 by the CIT(A). The only issue was the maintainability of the claim for set off of unabsorbed depreciation allowance for the earlier years. The claim was disallowed based on the amendment to section 32(2) of the Income Tax Act, 1961, restricting the carry forward of unabsorbed depreciation allowance to eight years. The relevant provision was amended by the Finance Act, 2001, removing this restriction from A.Y. 2002-03 onwards. The Revenue relied on the provision of section 32(2) as amended by Finance Acts of 1996 and 2000. The Special Bench of the tribunal had interpreted that the restriction of eight years would apply to depreciation for A.Ys. 1997-98 to 2001-02. However, the Gujarat High Court opined differently, allowing the claim for indefinite carry forward against profits and gains for subsequent years. The court held that the entire unabsorbed depreciation up to A.Y. 2001-02 shall be governed by the amended provision. The decision of the High Court prevailed over the Special Bench's decision, and the claim was allowed in accordance with the High Court's decision. In conclusion, the appeal was allowed based on the decision in General Motors India Pvt. Ltd., directing the allowance of the assessee's claims as per the court's decision. Order pronounced in the open court on November 27, 2013.
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