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TMI Blog2022 (9) TMI 1475X X X X Extracts X X X X X X X X Extracts X X X X ..... uent years, without any limit whatsoever. Recording the above submission of the D.R. and CIT(A) who has followed the jurisdictional High Court judgment in the case of General Motors (India) Pvt. Ltd. [ 2012 (8) TMI 714 - GUJARAT HIGH COURT] - Appeal filed by the Revenue is hereby dismissed. - ITA No. 162/Rjt/2015 - - - Dated:- 16-9-2022 - Ms. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member For the Appellant : Shri Shramdeep Sinha, CIT/DR For the Respondent : None ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- The present appeal has been filed by the Revenue against the order dated 24.02.2015 passed by the Commissioner of Income Tax (Appeals)-3, Rajkot as against the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period can be carried forward only for the eight assessment years. 5.1 It was observed by the AO that the appellant had carried forward unabsorbed depreciation belonging to AYs 96-97 to 98-99, totalling to Rs.5,22,76,985/- for set off. The AO observed that as per the provisions of s.32(2), unabsorbed depreciation cannot be carried forward for more than eight assessment years. The brought forward unabsorbed depreciation has been treated by ACIT as lapsed in view of amended provisions of s.32(2) as, according to the ACIT, the same had lapsed at the end of AY 2006-07, being eight years from the original assessment year. 5.2 During the course of appellate proceedings, it was contended by the appellant that identical issue has been d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Rs. 43,60,22,158/- for A.Y. 1997-98, which was not eligible for being carried forward and set off against the income for the A. Y. 2006-07. 31. Prior to the Finance Act No. 2 of 1996 the unabsorbed depreciation for any year was allowed to be carry forward indefinitely and by a. deeming fiction became allowance of the immediately succeeding year. The Finance Act No. 2 of 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation for the following previous year and deemed to be part of that allowance, or if there is no such allowance for that previous year, be deemed to be allowance of that previous year, and so on for the succeeding previous years. 36. The purpose of this amendment has been clarified by Central Board of Direct Taxes in the Circular No. 14 of 2001. The relevant portion of the said Circular reads as under:- Modification of provisions relating to depreciation 30.1 Under the existing provisions of section 32 of the Income-tax Act, carry forward and set off of unabsorbed depreciation is allowed for 8 assessment years. 30.2 With a view to enable the industry to conserve sufficient funds to replace plant and machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 be applied, giving fair and reasonable construction to the language of the section without leaning to the side of assessee or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rbed depreciation and it is taken to the next succeeding year. Where there is current depreciation for such succeeding year the unabsorbed depreciation is added to the current depreciation for such succeeding year and is deemed as part thereof. If, however, there is no current depreciation for such succeeding year, the unabsorbed depreciation becomes the depreciation allowance for such succeeding year. We are of the considered opinion that any unabsorbed depreciation available to an assessee on 1st day of April 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 once the Circular No. 14 of 2001 clarified that the restriction of 8 years for carry forward and set off ..... X X X X Extracts X X X X X X X X Extracts X X X X
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