9911796707
TMI Blog1983 (9) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment years 1975-76 and 1976-77 were filed belatedly on 6-11-1980. Under section 139(3) of the Income-tax Act, 1961 ('the Act'), any assessee who wants that the losses of earlier years should be carried forward under section 72, 73 or 74 of the Act, has to file the return of income within the time allowed under sub-section (1) of section 139 or within such further time which, on an application made in the prescribed form, the ITO may in his discretion allow. He held that the returns for the assessment years 1975-76 and 1976-77 are belated and in the eye of law non est. In the circumstances, the unabsorbed development rebate and unabsorbed depreciation cannot be set off against the income for the assessment years 1977-78 and 1978-79. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciation cannot be carried forward and set off. Since no assessment has been made for the assessment years 1975-76 and 1976-77, the unabsorbed depreciation of those years cannot be set off in these two years. 4. In the departmental appeals, the learned departmental representative submitted that what applies to unabsorbed depreciation equally applies to unabsorbed development rebate. Section 33(2) of the Act also speaks of the method of set off. Unless there is a claim in the year, the question of determination of the unabsorbed development rebate will not arise. Since the returns are filed belatedly, they are non est and as such no assessments have been made. Since no assessments have been made for the earlier years, the unabsorbed develop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a registered firm, in the assessment of its partners) full effect cannot be given to any allowance under clause (i) or clause (ii) or clause (iia) or clause (iv) or clause (v) or clause (vi) of sub-section (1) or under clause (i) of sub-section (1A) in any previous year owing to there being no profits or gains chargeable for that previous year, or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of sub-section (2) of section 72 and sub-section (3) of section 73, the allowance or part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following previous year and deemed to be part of that allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ately succeeding the assessment year relevant to the previous year in which the machinery or plant was installed. The above provision does not contemplate that an assessment should have been made for the carry forward of the unabsorbed development rebate to the following year, as in the case of depreciation. The word used in section 33(2) is 'assessable' and not 'assessed'. Section 34(3) contemplates creation of development rebate reserve account. Since there was loss as per books in the assessment years 1975-76 and 1976-77, the assessee could not create a reserve. The provisions of sections 34(3) and 33(2) were considered by the Karnataka High Court in Dodballapur Spg. Mills Ltd. v. CIT [1980] 121 ITR 94. It was held therein that the condi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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