2017 (3) TMI 1607 - HC - Income Tax

Set off of unabsorbed depreciation - whether to be dealt with in accordance with the provisions of Section 32(2) of the Income Tax Act as amended by Finance (No.1) Act 2001 and not by the provisions of Section 32(2) as it stood before the said amendment? - Held that - The issue arising in the present appeal stands concluded against the Revenue and in favour of the respondent-assessee by the order of this Court 2016 (7) TMI 1245 - BOMBAY HIGH COURT as held that the unabsorbed depreciation for the Assessment Year 1997-98 upto Assessment Year 2001-02 could be allowed to be set off if it was still unabsorbed on 1st April 2001. CBDT circular No.14 of 2001 dated 22nd November 2001 hold that any unabsorbed depreciation which is available on 1st day of April 2001 would be dealt with in accordance with the provisions of Section 32(2) of the Act as amended by the Finance Act of 2001. Moreover the Circular No.14 of 2001 issued by the CBDT clarifies that restriction of eight years to carry forward and set off the unabsorbed depreciation has been dispensed with. Consequently unabsorbed depreciation for the intervening periods between assessment 1997-98 upto 2001-02 if available in the assessment year 2002-03 would be allowable as part of carried forward depreciation from Assessment Year 2002-03 onwards. - Decided in favour of assessee.

Summary

Issues: Appeal challenging common order of the Income Tax Appellate Tribunal regarding unabsorbed depreciation treatment under Section 32(2) of the Income Tax Act for Assessment Years 2005-06 and 2006-07.

Analysis:
1. Background: The appeals under Section 260A of the Income Tax Act challenge the common order of the Income Tax Appellate Tribunal related to Assessment Years 2005-06 and 2006-07.

2. Question of Law: The appellant-revenue raised a question regarding the treatment of unabsorbed depreciation under Section 32(2) of the Income Tax Act as amended by Finance (No.1) Act, 2001, as opposed to the provisions before the said amendment.

3. Legal Precedents: The appellant's counsel acknowledged that the issue in the present appeal was decided against the Revenue in previous court orders related to the same respondent-assessee, where an identical issue was addressed and not entertained.

4. Conclusion: Given the legal precedents and the lack of any substantial question of law arising from the proposed question, the Court dismissed the appeals, stating that the question does not warrant further consideration.

5. Final Decision: Consequently, the appeals were dismissed with no order as to costs, bringing an end to the legal proceedings regarding the treatment of unabsorbed depreciation for the specified Assessment Years.