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TMI Blog2013 (7) TMI 998X X X X Extracts X X X X X X X X Extracts X X X X ..... s restored back. From the amendments to Finance Act,2001 it is clear that legislative intent was to allow un-absorbed depreciation to be carried forward beyond period of eight years. For the AY under consideration, correct law applicable was the law that prevailed as on the first day of April of that AY. In our opinion during the assessment year under consideration, amended provisions were applicable and AO was supposed to calculate the un-absorbed depreciation as required by the Act. In our opinion, there was no bar to allow the un-absorbed depreciation of the earlier years in the AY 2007-08 - Decided in favour of the assessee-company. X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of section 32(2) as substituted by Finance Act 2001 was a deeming provision, that a deeming provision could not be extended beyond the purpose for which it was intended, that section 32(2) was a substantive provision and hence was prospective in nature, that it apply only for AY 2002-03onwards,that the Sec.32(1) dealt with depreciation allowance for the current year, that if depreciation allowance for a particular year u/s 32(i) could not be given full effect deeming provisions of the section would apply. Finally, he held that, considering the provisions of section 32 of the Act, the unabsorbed depreciation allowance could not be set off as requested by the assessee. 2.2. Before us, Authorised Representative(AR) submitted that provisions of section 32(2) were amended by Finance Act 2001w.e.f. 1st April 2002, that by the said amendment position as existed prior to 01.04.1997 was restored, that upto AY 1996-97 unabsorbed depreciation of the previous year was treated as current years depreciation, that same was allowed to be set off against the income from any other head, that only a limited period the carrying forward was restricted to eight years, that assessee was entitled to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar issue has been discussed and decided by the Hon'ble High Court of Gujarat on 23.08.2012.,in the case of General Motors India Pvt. Ltd. in following manner : ""30. The last question which arises for consideration is that whether the unabsorbed depreciation pertaining to AY. 1997-98 could be allowed to be carried forward and set off after a period of eight years or it would be governed by Section 32 as amended by Finance Act 2001? The reason given by the Assessing Officer under section 147 is that Section 32(2) of the Act was amended by Finance Act No.2 of 1996 w.e.f. AY. 1997-98 and the unabsorbed depreciation for the A.Y. 1997-98 could be carried forward up to the maximum period of 8 years from the year in which it was first computed. According to the Assessing Officer, 8 years expired in the A.Y. 2005-06 and only till then, the assessee was eligible to claim unabsorbed depreciation of A.Y.1997-98 for being carried forward and set off against the income for the A.Y. 2005-06. But the assessee was not entitled for unabsorbed depreciation of ₹ 43,60,22,158/- for A.Y. l997-98, which was not eligible for being carried forward and set off against the income for the A.Y. 2006- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years." 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 for carry forward and set off of unabsorbed depreciation. The amendment is applicable from assessment year 2002-03 and subsequent years. This means that any unabsorbed depreciation available to an assessee on 1st day of Apr1, 2002 (A.Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001 and not by the provisions of section 32(2) as it stood before the said amendment. Had the intention of the Legislature been to allow the unabsorbed depreciation allowance worked out in A.Y. 1997-98 only for eight subsequent assessment years even after the amendment of section 32(2) by Finance Act, 2001 it would have incorporated a provision to that effect. However, it does not contain any such provision. Hence keeping in view the purpose of amendment of section 32(2) of the Act, a purposive and harmonious interpretation has to be taken. While construing taxing statutes, rule of strict interpretation has to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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