1991 (1) TMI 11 - HC - Income Tax

Summary

Issues Involved:
1. Entitlement to set-off of unabsorbed depreciation for specific assessment years.
2. Finality of assessments and re-agitation in subsequent years.
3. Applicability of section 80 of the Income-tax Act, 1961.

Summary:

Issue 1: Entitlement to Set-off of Unabsorbed Depreciation
The court examined whether the assessee was entitled to set-off unabsorbed depreciation for the assessment years 1960-61 to 1964-65 in the assessment year 1965-66. The Income-tax Officer (ITO) had disallowed the set-off on the grounds that the depreciation had not been determined for carry forward in the respective years, and the assessment orders had become final. The Tribunal upheld this view, noting that the returns for some years were filed beyond the permissible time limit, and for other years, the assessments had been closed as "not assessable" or had not been appealed by the assessee.

Issue 2: Finality of Assessments and Re-agitation in Subsequent Years
The court addressed whether the assessee could re-agitate the issue of unabsorbed depreciation in the subsequent assessment year 1965-66. The Tribunal held that since the assessments for the earlier years had attained finality, the assessee could not reopen these concluded matters. The court agreed, emphasizing that the assessee had not pursued appeals against the earlier assessment orders, which had consistently negatived the claim for depreciation or its carry forward.

Issue 3: Applicability of Section 80 of the Income-tax Act, 1961
The Tribunal had referred to section 80 of the Act, which deals with the carry forward and set-off of losses, to emphasize the importance of determining depreciation in the assessment order itself. However, the court found this reference unnecessary as the controversy was restricted to the set-off of unabsorbed depreciation and not the carry forward and set-off of losses. Therefore, the court returned the reference on the third question unanswered.

Conclusion:
The court answered questions 1 and 2 in the affirmative and against the assessee, affirming that the assessee was not entitled to set-off unabsorbed depreciation for the assessment years 1960-61 to 1964-65 in the assessment year 1965-66, and could not re-agitate the issue in the subsequent year due to the finality of the earlier assessments. The third question regarding section 80 was deemed unnecessary to answer. The Revenue was awarded costs of Rs. 500.