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2022 (11) TMI 1034 - AT - Income TaxUnabsorbed depreciation set off against business income - HELD THAT - The issue of the set off of carry forward unabsorbed depreciation has been held in favour of the assessee by even jurisdictional Hon ble Bombay High Court in the case of CIT v/s Hindusthan Unilever Ltd 2016 (7) TMI 1245 - BOMBAY HIGH COURT held 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. No decision contrary to the decision of the Gujarat High Court 2012 (8) TMI 714 - GUJARAT HIGH COURT has been shown to us. No substantial question of law.
Issues Involved:
1. Disallowance under section 14A 2. Addition on account of incorrect carry forward of unabsorbed depreciation 3. Claim of unabsorbed depreciation for AY 2000-01 and 2001-02 4. Delay in filing the appeal 5. Request to add, amend, modify, or delete grounds of appeal Analysis: Issue 1: Disallowance under section 14A The Assessee challenged the disallowance of Rs.44,070 under section 14A, contending it was unwarranted, unjustified, and contrary to the provisions of the Act. The appeal was directed against the order of the Commissioner of Income Tax (Appeals), Pune. The Appellate Tribunal held that the issue was not pressed by the Assessee, and therefore, it was dismissed. Issue 2: Addition on account of incorrect carry forward of unabsorbed depreciation The Assessee disputed the addition of Rs.75,43,846 due to incorrect carry forward of unabsorbed depreciation. The Assessing Officer did not allow unabsorbed depreciation before AY 2002-03, leading to a disagreement. The Appellate Tribunal referred to various judgments and highlighted the importance of following binding precedents. The Tribunal ultimately allowed the appeal, stating that the Assessee was eligible to set off unabsorbed depreciation for AY 2000-01 and 2001-02. Issue 3: Claim of unabsorbed depreciation for AY 2000-01 and 2001-02 The primary contention revolved around the claim of unabsorbed depreciation for AY 2000-01 and 2001-02. The Assessing Officer disallowed the set off against the income of AY 2010-11, citing provisions of section 32(2) of the Act. The Commissioner of Income Tax (Appeals) upheld the AO's decision, relying on a Special Bench decision. However, the Appellate Tribunal, following the precedent set by the Bombay High Court, allowed the Assessee's claim to set off unabsorbed depreciation for the mentioned assessment years. Issue 4: Delay in filing the appeal The Assessee requested the appeal to be allowed, condoning the delay in filing. The Tribunal did not provide specific details on the decision regarding the delay, but it mentioned that the appeal was partly allowed, indicating some relief granted to the Assessee. Issue 5: Request to add, amend, modify, or delete grounds of appeal The Assessee prayed to be allowed to add, amend, modify, rectify, delete, or raise any grounds of appeal at the time of the hearing. The Tribunal dismissed this issue, stating that Ground Numbers 4 and 5 were general in nature and did not require adjudication. In conclusion, the Appellate Tribunal partially allowed the Assessee's appeal, granting relief on the issues related to the incorrect carry forward of unabsorbed depreciation for AY 2000-01 and 2001-02, while dismissing the other issues raised by the Assessee. The Tribunal emphasized the importance of following binding precedents and legal interpretations in resolving tax disputes.
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