TaxTMI 
TaxTMI 
2014 (10) TMI 74
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....t Year 1992-93 declaring nil income. The Assessing Officer issued notice under Sec.143(2) of Income Tax Act and finalised the assessment. The assessee had claimed unabsorbed depreciation under the head capital gains . However, the Assessing Officer was of the view that in view of the restriction under Sec.34A of the Act, no set off of unabsorbed depreciation can be allowed and passed the assessment order without giving benefit of unabsorbed depreciation. 3. The Assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) allowed the appeal and held as follows: " As regards unabsorbed depreciation, section 32(2) makes it very clear that it has to be treated on par with the curre....
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....llowing the above decision of the Apex court, dismissed the appeal. Aggrieved by which, the Revenue is before this court. 5. On admission, the following substantial questions of law have been formulated: (1)Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in upholding the order of the Commissioner of Income Tax (Appeals) directing the set off of the income under the head capital gains against unabsorbed depreciation for the assessment year 1992-93? (2) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in ignoring the provisions of sub-sections (1) and (2) to Section 34A which were in force for the assessment year 1....
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.... be allowed against the income under the head capital gains . 9. Mr.Dhanaraj, the learned Official Liquidator would also concede that there is a restriction under sec.34A of the Act restricting only 2/3rd of unabsorbed depreciation. However, he would point out that the matter has to be remitted back to the Assessing Officer to recompute and the department has to make an application only to the Official Liquidator for any tax due during the relevant period, as the company is in liquidation. He would also submit that the restricted allowance can be made against the capital gains also and relied on the following case laws: 1. Commissioner of Income Tax vs Jaipuria China Clay Mines (P) Ltd (1966) 59 ITR 555 (SC) 2. Garden Silk Weaving ....
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....e contention of the revenue is that the restriction under sec.34A which came into force with effect from 1.4.92 was not under consideration in the above two decisions. 12. In Commissioner of Income Tax vs Kunal Engineering Co Ltd (2010) 236 CTR (Mad) 619, a Division Bench of this court considered sec.34A of the Act, which is as follows: This court considered that sec.34A of the Income Tax Act restricts on unabsorbed depreciation and unabsorbed investment allowance for limited period, in case of certain domestic companies. Sec.34A was introduced by the legislature w.e.f.1st April, 1992 which reads as follows: "34A(1) In computing the profits and gains of the business of a domestic company in relation to the previous year relevant to....
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....d the above provision. Therefore the order of the Tribunal is in accordance with law and the finding is given based on materials". 13. Similarly, in the case of Commissioner of Income Tax vs Kissan Engineering Ltd (2013) 84 CCH 131 AIIHC, High Court of Allahabad considered the restriction under sec.34A. The facts of the above case is also similar to the case on hand where the assessee has claimed unabsorbed depreciation against capital gain. The court has considered sec.32(2), 32A(3) and sec.34A of the Act and also placed reliance of Commissioner of Income Tax vs Kunal Engineering Co Ltd (2010) 236 CTR (Mad) 619 cited supra and held that the set off of unabsorbed depreciation on capita gains can be allowed but restricted to the extent of....