AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (12) TMI 126
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....rred to as the "Act") for AY 2004-05, vide his orders dated 26.11.2009 and 29.12.2006 respectively. 2. The only issue in ITA No. 05/K/2011 of assessee is against the order of CIT(A) in confirming the action of AO by holding that unabsorbed depreciation cannot be set off against the profit for the relevant assessment year as the assessee being a 100% Export Oriented Unit (EOU) on which deduction u/s. 10B of the Act has been claimed in AY 1997-98. For this, assessee has raised following ground nos. 1 and 2: "1. That the observation of Ld. CIT (A) which reads that provisions contained in section 10B(6) of Income Tax Act, 1961 does not mention that unabsorbed depreciation will not be carried forward only when deduction U/s 10B is cl....
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....d to be carried forward 1997-98 Rs. 7,67,01,019/- 1998-99 Rs. 5,98,94,082 Rs.13,65,95,001/-" The AO noted the provision of section 10B(6) and section 32 of the Act and that in view of these provisions the deduction for any of the relevant assessment year ending before 01.04.2007 is to be treated as given full effect for the assessment year itself. Therefore, the AO observed as under: "......Therefore, unabsorbed depreciation pertaining to assessment year 2000-01 or earlier years cannot be allowed to be carried forward and set off. Therefore, the amount of unabsorbed depreciation to be allowed to be carried forward for assessment year 1997-98 would be Rs. 1,21,17,053/- (Unabsorbed depreciation determined ....
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....7-98 and 1998-99 is wrong on the part of the AO. For assessments year 1997-98 and 1998-99 is wrong on the part of the AO. For assessments year 1997-98 Ld. AR claimed that the set-off of unabsorbed depreciation should be allowed because in that year the assessee did not claim deductionu/s.10B. For assessment year 1998-99 Ld. AR. has pointed out that the unabsorbed depreciation has already been reduced by the assessee itself in the revised computation of income and therefore, the question of not allowing set off of such unabsorbed depreciation does not arise. I would like to take up this issue for the two assessment years separately. Assessment Year 1997-98 In respect of this assessment year if we look at the langua....
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....les run by the assessee company is a 100% EOU and it is subsidiary of the assessee company. Ld. Counsel also stated that there is no dispute that according to the provisions of section 10B(6) of the Act unabsorbed depreciation of EOU relating to AY upto 2001-02 is not admissible while computing income of subsequent assessment years. According to him, the AO failed to consider that Zenith Textiles was approved by Govt. of India as a 100% EOU on 26.09.1997 and assessee did not make any claim for deduction u/s. 10B of the Act for that assessment year i.e AY 1997-98. According to him, the restriction imposed u/s. 10B(6) of the Act so far as unabsorbed depreciation of Rs. 7,67,01,019/- cannot hold good as the assessee did not claim any deduction....
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.... relatable to Zenith Textiles is not hit by the provision of section 10B(6) of the Act factually. Accordingly, we are of the considered view that the assessee's claim of unabsorbed depreciation relatable to AY 1997-98 is to be allowed and the AO is directed accordingly. The orders of the lower authorities i.e. the AO and that of the CIT(A) are reversed. This issue of assessee's appeal is allowed. 6. The appeal for AY 2004-05 in ITA No. 06/K/2011 is against the order of CIT(A) in not admitting the appeal as there was a delay in filing of appeal for an about 6 months and 19 days. For this, assessee has challenged that it was not allowed reasonable opportunity of being heard and for this following three grounds are raised: ....