TaxTMI 
TaxTMI 
2013 (7) TMI 998
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.... 1998-99 whereas assessment was for the year 2007-08 and such provisions applicable for the AY 2007-08 should have been applied. Reliance is placed on judgment given in case of M/s. Jai Ushin Limited Vs. Dy. CIT Central Circle-14, New Delhi AIT-2008-242-ITAT I.T.A.No.3412/Del/2006. Consequently, interest was charged u/s 234B & 234C and demand adjusted against Refund due for AY 2008-09. (ii) The appellant craves leave to add, to amend, vary or alter including by substitution any of the grounds of appeal as they or their representatives may think fit Facts of the case Vide its letter dated 24.04.2011 assessee-company requested the Assessing Officer (AO) to pass an order u/s.154 of the Act with regard to brought forward losses of earlier....
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....te Authority(FAA).After considering the submissions of the assessee and the assessment order passed by the AO u/s.154 of the Act, he held that the provisions of section 32(2) as substituted by Finance Act 2001 was a deeming provision, that a deeming provision could not be extended beyond the purpose for which it was intended, that section 32(2) was a substantive provision and hence was prospective in nature, that it apply only for AY 2002-03onwards,that the Sec.32(1) dealt with depreciation allowance for the current year, that if depreciation allowance for a particular year u/s 32(i) could not be given full effect deeming provisions of the section would apply. Finally, he held that, considering the provisions of section 32 of the Act, the u....
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....f the Act in right perspective. Perusal of provisions of section 32 show that prior to 01- 04-1997,un-absorbed depreciation of the previous year used to be claimed as current depreciation and would be allowed to be set-off against income from any other head. By an amendment to the provisions of Section 32(2) of the Act, w.e.f. 01-04-1997,treatment of un-absorbed depreciation underwent a change-because as per the amended provisions un-absorbed depreciation was no longer deemed to be part of current depreciation and the period available for set-off of such unabsorbed depreciation from profits of subsequent years was restricted to eight years. It is noteworthy that during earlier period(up to 31.03.1997) no such time limit was prescribed. Vide....
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....ed. According to the Assessing Officer, 8 years expired in the A.Y. 2005-06 and only till then, the assessee was eligible to claim unabsorbed depreciation of A.Y.1997-98 for being carried forward and set off against the income for the A.Y. 2005-06. But the assessee was not entitled for unabsorbed depreciation of Rs. 43,60,22,158/- for A.Y. l997-98, which was not eligible for being carried forward and set off against the income for the A.Y. 2006- 07. 31. Prior to the Finance Act No.2 of 1996 the unabsorbed depreciation for any year was allowed to be carry forward indefinitely and by a deeming fiction became allowance of the immediately succeeding year. The Finance Act No.2 of 1996 restricted the carry forward of unabsorbed depreciation and....
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.... of depreciation under section 32 shall be mandatory. 30.3 Under the existing provisions, no deduction for depreciation is allowed on any motor car manufactured outside India unless it is used (i) in the business of running it on hire for tourists, or (ii) outside in the assessee's business or profession in another country. 30.4 The Act has allowed depreciation allowance on all imported motor cars acquired on or after 1st April, 2001. 30.5 These amendments will take effect from the 1st April, 2002, and will, accordingly, apply in relation to the assessment year 2002-03 and subsequent years." 37. The CBDT Circular clarifies the intent of the amendment that it is for enabling the industry to conserve sufficient funds to replace pla....
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....e profits and gains of business or profession for any previous year, deduction of depreciation under Section 32 shall be mandatory. Therefore, the provisions of section 32(2) as amended by Finance Act, 2001 would allow the unabsorbed depreciation allowance available in the A.Y. 1997-98, 1999-2000, 2000-01 and 2001-02 to be carried forward to the succeeding years, and if any unabsorbed depreciation or part thereof could not be set off till the A.Y. 2002-03 then it would be carried forward till the time it is set off against the profits and gains of subsequent years. 38. Therefore, it can be said that, current depreciation is deductible in the first place from the income of the business to which it relates. If such depreciation amount is la....