TaxTMI 
TaxTMI 
2012 (1) TMI 324
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....d Shri V. Jagadisan, F.C.A. represented on behalf of the assessee. 2. In this appeal, the Revenue has taken 5 grounds of appeal. The only issue, which was argued by the ld. DR was that the ld. CIT(A) has erred in allowing the claim of brought forward depreciation losses from the assessment years 1983-84 to 1995-96 and their set off against the business profits of the current assessment year 2003-04 when the word used in the Income Tax Act was 'first computed' and not any other term. Hence, the time limit for carry forward and set off for unabsorbed depreciation losses expired in the assessment year 2001-02. 3. We have heard the rival submissions and perused the material available on record. 4. The ld. CIT(A) has decided the issue b....
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....f the I T Act. As per the amended provisions of sec.32(2) of the Act, w.e.f. 01.04.1997 the unabsorbed depreciation losses can be carried forward for a maximum of 8 assessment years from the end of the assessment year in which such losses were first computed. The relevant provisions are as under: Section 32 2) Where in the assessment of the assessee full effect cannot be given to any allowance under clause (ii) of sub-section (J) in any previous year owing to there being no profits or gains chargeable for that previous year or owing to the profits or gains being less than the allowance, then. the allowance or the part of allowance to which effect has not been given (hereinafter referred to as unabsorbed depr....
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....he old provisions of sec.32(2) existing ought 31.3.97 ,all the brought forward depreciation allowances gets merged with the current years depreciation allowance. Hence, with the change in the law w.e.f. 01.04.1997, the entire unabsorbed depreciation allowance (including those brought forward from earlier years) is deemed to be unabsorbed depreciation allowance of A.Y .1997 -98 and the period of limitation of 8 years is to be* reckoned from the A.Y.1997-98 only. Further as per the Circular No.762 dt. 18.02.1998 issued by the CBDT, the consequences of the amended provisions of sec.32(2) are explained that the unabsorbed depreciation of A. Y. 1996-97 will be added to the depreciation allowance of A.Y. 1997-98 and deemed to be pa....
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....rd notwithstanding the fact that sub-section (2) of section 72 maintains a distinction between them regarding the priorities. Finance (No.2), Act, 1996 23.4 In order to help the revival of sick companies, an amendment has been made which provides that the period of rehabilitation of such a company, as ordered by the BIFR, shall be excluded in reckoning the period of eight years now prescribed for the purposes of carry forward and set off of the unabsorbed depreciation. Finance (No.2), Act, 1996 23.5 Sub-section (2) of section 32, as it existed upto assessment year 1996-97, provided that the unabsorbed depreciation of a year shall be added to the amount of the allowance for depreciation of the following pr....
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....bsorbed depreciation once again was made available to the assessee indefinitely by clubbing with the current depreciation allowance. Therefore, the assessee is entitled for carry forward of unabsorbed depreciation allowance available during the A.Y.1997-98 to the A.Y. 2003-04 and claim the same as set off against the income of A.Y.2003-04. Accordingly, the Assessing Officer is directed to allow the assessee's claim of brought forward of unabsorbed depreciation losses from A.Ys. 1983-84 to 1993-94 and allow the same as set off against the income of A.Y.2003-04. In view of the above, the assessee's appeal is allowed." 5. At the time of hearing, the ld. DR very fairly conceded that the issue was covered in favour of th....