INCOME TAX ACT, 1961

Section 72(1)

Loss - Carry forward and set off - Unabsorbed depreciation - Effect of amendment in section 32(2) w.e.f. 1-4-1997 and CBDT Circular No. 14 of 2001

Issue arose for consideration was whether the Tribunal was erred in allowing carry forward of unabsorbed depreciation for the assessment years 1996-97 to 1998-99 beyond the period of eight assessment years in contravention of section 32(2)(iii)(b) as amended by Finance No. 2 Act, 1996 with effect from 1-4-1997. Held: Any unabsorbed depreciation available to an assessee on 1-4- 2002 will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001. As the restriction of 8 years for carry forward and set-off of unabsorbed depreciation had been dispensed with as clarified by Circular No. 14 of 2001 dated 22-11-2001, the unabsorbed depreciation from assessment year 1996-97 up to the assessment year 2001-02 got carried forward to the assessment year 2002-03 and became part thereof, it came to be governed by section 32(2), as amended by Finance Act, 2001 and were available for carry forward and set off against the profits and gains of subsequent years, without any limit, whatsoever.

Followed:General Motors India Private Limited v. Dy CIT [(2013) 354 ITR 244 (Guj): 2013 TaxPub(DT) 0624 (Guj-HC)]

REFERRED : Pr. CIT v. Panchmahal Steel Ltd. [R/Tax Appeal No. 1157 of 2018, dt. 18-9-2018] : 2019 TaxPub(DT) 2637 (Guj-HC), Pr. CIT v. Panchmahal Steel Ltd. (2019) 106 taxmann.com 131 (SC) : 2019 TaxPub(DT) 2001 (SC),Dy. CIT v. General Motors India P. Ltd. [SLP Civil CC No. 5424/2013] : 2018 TaxPub(DT) 3463 (SC)

FAVOUR : In assessee's favour

A.Y. : 2007-08

SUBSCRIBE FOR FULL CONTENT