1987 (7) TMI 65

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....stered firm under the provisions of section 77 of the Income-tax Act ?" The assessment year is 1972-73. The facts in brief are that the assessee is a partnership firm. During the year 1971-72 (assessment year), it was assessed as an unregistered firm with only two partners, Sakaldeep Narayan Choudhary and Pradip Narayan Choudhary. Part of the unabsorbed development rebate and depreciation was set off during that assessment year. Even after set off, a sum of Rs. 43,293 remained as unabsorbed development rebate and depreciation to be carried forward and set off in later years. Then came the assessment year in question. In that year, i.e., 1972-73, an application for registration was filed by the firm. The application was allowed. In the....

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....the assessee was entitled to the set off of development rebate and depreciation allowance of the previous year in the assessment year in question, there would be a case for rectification. If, however, law does not permit carrying forward of unabsorbed development rebate and depreciation allowance of the an unregistered firm, when in subsequent year it became registered firm (sic). The Tribunal, following the decision of the Allahabad High Court in 1. K. Hosiery Factory v. CIT [1973] 92 ITR 16, held that the assessee was entitled to carry forward the unabsorbed development rebate and unabsorbed depreciation allowance of the unregistered firm and having it set off in the subsequent year treated as a registered firm. The appeal of the assessee....

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.... not indicate any intention to deprive the firm subsequently registered of its right to carry forward the unabsorbed depreciation. The authoritative pronouncement of the Supreme Court is not open to challenge. Learned senior standing counsel for the Revenue, however, contended that the case of CIT v. J. K. Hosiery Factory [1986] 159 ITR 85 before the Supreme Court related to the law under the Indian Income-tax Act, 1922. According to him, the law has changed under the Income-tax Act, 1961, which rules the present case and, therefore, the matter requires a fresh look. Learned senior standing counsel, however, failed to bring to our notice any change in law after the decision of the Supreme Court in CIT v. J. K. Hosiery Factory [1986] 159 ....