2019 (8) TMI 656 - HC - Income Tax

Disallowance of carry forward of unabsorbed depreciation - whether circular NO.14 of 2001 had clarified that the amendment to the Finance Act was prospective? - HELD THAT - The issue raised by the Revenue is no longer res integra in view of the decision of this Court in the case of General Motors Pvt Ltd vs. Deputy CIT 2012 (8) TMI 714 - GUJARAT HIGH COURT as held that 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 - writ petition allowed in favour of assessee.

Summary

Issues:
Tax Appeal under Section 260A of the Income Tax Act, 1961 against the order passed by the Income Tax Appellate Tribunal for the assessment year 2013-14. The main question is whether the Appellate Tribunal erred in deleting the addition of ?5,17,72,276 made by the Assessing Officer on account of disallowance of carry forward of unabsorbed depreciation.

Analysis:
The judgment deals with a Tax Appeal under Section 260A of the Income Tax Act, 1961, filed by the Revenue against the order of the Income Tax Appellate Tribunal for the assessment year 2013-14. The primary issue revolves around the deletion of an addition of ?5,17,72,276 by the Assessing Officer concerning the disallowance of carry forward of unabsorbed depreciation. The Revenue contended that the Appellate Tribunal erred in law and on facts in upholding the decision of the CIT(A) regarding this deletion. The specific question proposed by the Revenue for the court's consideration was whether the Appellate Tribunal's decision was erroneous given the clarification in circular NO.14 of 2001 that the amendment to the Finance Act was prospective.

The judgment references a prior decision of the Court in the case of General Motors Pvt Ltd vs. Deputy CIT [354 ITR 244], stating that the issue raised by the Revenue is no longer res integra. This implies that the matter has already been conclusively settled by the Court in a previous case. Consequently, the Court found that the issue at hand has already been addressed and decided in a previous judgment. Therefore, the Court dismissed the Tax Appeal, ruling against the Revenue's contentions and upholding the decision of the Appellate Tribunal in deleting the addition of ?5,17,72,276 related to the disallowance of carry forward of unabsorbed depreciation made by the Assessing Officer.