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TMI Blog2015 (3) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... 25-3-2015 - SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER Appellant by : Shri Yogesh A Thar Respondent by : Shri Love Kumar ORDER PER BENCH: The aforesaid appeals have been filed by the Assessee against separate impugned order of even date 22.03.2013, passed by Ld. CIT(A)-9, Mumbai for the A.Ys. 2005-06, 2006-07, 2007-08 2008- 09. The sole issue raised in the grounds of appeal in all the years are that, Ld. CIT(A) has erred in law and on facts in upholding the order of the AO that unabsorbed depreciation for the following years have lapsed in view of the provisions of section 32(2) and therefore, will not be available for set off:- A.Y. 2005-06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO relying upon the decision of Special Bench in the case of Times Guarantee Ltd. (supra). 3. Before us, learned counsel submitted that the decision of the Special Bench in the case of Times Guarantee Ltd., is no longer a good law in view of the decision of Hon ble Gujarat High Court in the case of General Motors India Pvt. Ltd. Vs. CIT reported in (2013) 354 ITR 244. He also informed that SLP against said decision filed by the Revenue has also been dismissed. Further following the said decision of the Hon ble Gujarat High Court, Co-ordinate Benches of Mumbai Tribunal have followed the decision of Hon ble Gujarat High Court and held that unabsorbed depreciation could be allowed to be carried forward and set off, after a period of 8 years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year(s) to be set off against income under any head, like current depreciation. B. In the second period (i.e. assessment years 1997-98 to 2001- 02) (i) Brought forward unadjusted .depreciation allowance for and up to assessment year 1996-97 (hereinafter called the 'First unadjusted depreciation allowance'), which could not be set off up to assessment year 1996-97, shall be carried forward for set off against income under any head for a maximum period of eight assessment years starting from assessment year 1997-98. (ii) Current depreciation for the year under section 32(1) (for each year separately starting from assessment year 1997-98 up to 2001-02) can be set off firstly against business income and then against income under a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation under section 32( 1), that is depreciation for the current year in the following year(s) to be set off against income under any head, like current depreciation, in perpetuity. However, in a later decision, the Hon ble Gujarat High Court vide order dated 23.08.2012 in the case of General Motors India Pvt. Ltd (supra), After considering the provision of section 32(2), before its amendment by Finance Act 2001 and also after the amendment and also the Board Circular No. 14 of 2001 observed and held as under:- 37. The CBDT Circular clarifies the intent of the amendment that it is for enabling the industry to conserve sufficient funds to replace plant and machinery and accordingly the amendment dispenses with the restriction of 8 years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under section 32 shall be mandatory. Therefore, the provisions of section 32(2) as amended by Finance Act, 2001 would allow the unabsorbed depreciation allowance available in the A.Y. 1997-98, 1999-2000, 2000-1 and 2001-02 to be carried forward to the succeeding years, and if any unabsorbed depreciation or part thereof could not be set off till the A.y. 2002-03 then it would be carried forward till the time it is set off against the profits and gains of subsequent years. 38. Therefore, it can be said that, current depreciation is deductible in the first place from the income of the business to which it relates. If such depreciation amount is larger than the amount of the profits of that business, then such excess comes for absorptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of the Hon ble Gujarat High Court has been followed in several decisions rendered by the Co-ordinate Benches of the Tribunal. Respectfully following the ratio of Hon ble Gujarat High Court, we direct the AO to allow the set off of unabsorbed depreciation pertaining to the A.Y. 1997-98 to 2000-01 in the respective A.Ys. 2005-06 to 2008-09 in accordance with the decision of General Motors India Pvt. Ltd. (supra). Accordingly, the ground raised by the assessee in all the appeals are treated as allowed. 7. Other grounds relate to lack of opportunity and non consideration of submissions were not argued before us, therefore, same are treated as dismissed. Accordingly, all the appeals of the assessee are treated as partly allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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