Tribunal allows set-off of carried forward depreciation, following High Court ruling.

The Tribunal upheld the decision of the Ld. CIT(A) to allow the set-off of carried forward depreciation from previous years against the current year's income. The Tribunal found that the issue had been settled in favor of the assessee by the decision of the Hon'ble Jurisdictional High Court, which ruled that the unabsorbed depreciation could be set-off beyond the usual eight-year limit. The appeal of the Revenue was dismissed, affirming the allowance of set-off based on relevant legal provisions and judicial precedents.

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Issues:
Allowance of set-off of carried forward depreciation from previous years against current year's income.

Analysis:
The appeal was filed by the Revenue against the order of the Ld. Commissioner of Income-tax (Appeals) for the Assessment Year 2009-10. The Revenue raised grounds challenging the direction of the Ld. CIT(A) to allow set-off of carried forward depreciation from previous years against the income of the current year. The main contention was whether the unabsorbed depreciation for Assessment Years 1997-98 to 2000-01 could be carried forward beyond the usual eight-year period and set-off against the income of the assessee for the years 2007-08, 2008-09, and 2009-10.

The Learned Counsel for the assessee argued that the issue was covered by a decision of the Hon'ble Jurisdictional High Court in a similar case, where the set-off of brought forward depreciation loss was allowed. The Ld.CIT(A) also relied on a circular and previous judicial decisions to support the assessee's claim for adjusting unabsorbed depreciation from earlier years against the current year's income. The Assessing Officer had denied the set-off based on the limitation of carrying forward depreciation to only eight assessment years immediately succeeding the year in which the loss was first computed.

Upon reviewing the orders of the authorities below, the Tribunal found that the issue had been settled in favor of the assessee by the decision of the Hon'ble Jurisdictional High Court. The High Court had ruled that no substantial question of law arose against the Tribunal's order allowing the set-off of unabsorbed depreciation beyond the eight-year limit. The Tribunal upheld the order of the Ld.CIT(A) and dismissed the appeal of the Revenue, concluding that the unabsorbed depreciation from the earlier years could be set-off against the current year's income, as per the relevant legal provisions and judicial precedents.

In light of the detailed analysis and the legal principles applied by the Tribunal, the appeal of the Revenue was ultimately dismissed, affirming the decision to allow the set-off of carried forward depreciation from previous years against the current year's income.

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