1980 (3) TMI 140 - AT - Income Tax

Summary

Issues:
1. Rectification of finding by the Tribunal in ITA No. 1958 (Mds) 76-77 dated 17th Feb., 1978 regarding setting off unabsorbed depreciation against income for the assessment year 1973-74.

Detailed Analysis:
The Tribunal had held that unabsorbed depreciation of the earlier year cannot be set off against the assessee's income for the current assessment year, preferring the views of the Allahabad High Court and the Gujarat High Court over the Bombay High Court. The assessee sought rectification based on subsequent judgments of the Madras High Court expressing agreement with the Bombay High Court's decision. The Tribunal's conclusion was challenged, arguing that the Madras High Court's subsequent agreement with the Bombay High Court's decision rendered the Tribunal's decision erroneous, citing legal precedents from Gujarat and Madras High Courts (Parshuram Pottery Works Co. Ltd. vs. D.R. Trivedi, N. Kuppanna Gounder vs. IAC (CT), K.S. Gopalaswami Iyer vs. Sales Tax Tribunal).

The Tribunal justified its decision by explaining that at the time of the original order, no Madras High Court judgment was available, and there were conflicting views among different High Courts. The Tribunal's reliance on the Bombay High Court's decision was deemed debatable, and the subsequent agreement by the Madras High Court did not make the issue non-debatable at the time of the Tribunal's order. The Tribunal clarified that had the Madras High Court's decision been available earlier, it would have been binding, but the absence of such a decision did not constitute a mistake apparent from the records. The argument that the Tribunal had followed Allahabad and Gujarat High Courts in previous cases was countered by the fact that the Tribunal was not informed of cases where it had taken a contrary view, thus not constituting a mistake apparent from the records.

Ultimately, the Tribunal dismissed the application for rectification, upholding its original decision regarding the set off of unabsorbed depreciation against the assessee's income for the assessment year in question.