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TMI Blog1997 (9) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... eaving Factory [1975] to claim such set off in respect of unabsorbed depreciation of the earlier years. The decision of the Tribunal was rendered on November 30, 1976. Subsequent to the said decision, the Madras High Court rendered a judgment in 119 ITR 444 following certain decisions of the CIT v. Nagapatinam Import and Export Corporation 1979] Bombay High Court. The view of the Madras High Court was that the assessee could claim such a set off. Armed with this decision of the Madras High Court, the assessee filed an application under section 254(2) of the Income-tax Act, 1961, seeking rectification. Section 254(2) of the Income-tax Act, 1961, is as follows : "(2) The Appellate Tribunal may, at any time within four years from the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te an error on the face of the record and, therefore, rectifiable under section 154 of the Act. The power under section 254(2) is not different from the power under section 154 of the Act. With respect to the learned judge, we think that the learned judge has committed an error in relying on the judgment of a Division Bench of this court in Mettur Chemical and Industrial Corporation Ltd. v. CIT [1977] 110 ITR 822. We have 110 ITR 822 carefully perused the judgment in Mettur, Chemical and Industrial Corporation Ltd., v. CIT [1977] (Mad) and we find that was not a case, which related to a subsequent judgment of the jurisdictional High Court having an effect on earlier order of the Tribunal. All that the Division Bench held was that the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous High Courts and holds as follows : (i) Excessive depreciation should be adjusted in the assessment of the assessee against other business income and against other heads of income; (ii) Depreciation which remains unabsorbed under (i) will be apportioned to the partners and the share of each will be adjusted against the business and other income of each of the partners pro tanto : (iii) If full effect cannot be given to the depreciation allowance of the assessee by the above processes and some depreciation remains unadjusted, the assessee-firm will carry it forward to the succeeding assessment years." Therefore, even on merits the assessee cannot succeed in seeking to set off unabsorbed depreciation of the earlier years. This ..... X X X X Extracts X X X X X X X X Extracts X X X X
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