High Court dismisses appeal on Income Tax Tribunal's depreciation ruling for Assessment Year 2007-08

The High Court of Bombay dismissed the appeal challenging the Income Tax Appellate Tribunal's order for the Assessment Year 2007-08 on depreciation and deficit carry forward issues. The Court upheld the Tribunal's decision to allow depreciation and set off deficit based on a previous High Court ruling, despite the Revenue's objections citing a Supreme Court judgment on double deduction. The Court found no substantial legal issue in the appeal and ruled in favor of the respondent without costs.

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Issues:
1. Challenge to the order of the Income Tax Appellate Tribunal for the Assessment Year 2007-08 regarding depreciation and carry forward of deficit.

Analysis:
The High Court of Bombay heard an appeal challenging the Tribunal's order on two main issues: the allowability of depreciation on capital assets for charitable activities and the set off of earlier years' deficit against current year's income. The Revenue raised questions regarding the Tribunal's decision to allow depreciation and carry forward of deficit, citing a Supreme Court judgment on double deduction. However, the Tribunal's order was based on a previous decision of the High Court in a similar case. The Revenue's counsel acknowledged that the issue had been settled by the High Court's previous decision. Consequently, the High Court found that the questions raised did not present any substantial legal issue and dismissed the appeal without costs.

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