1987 (10) TMI 86

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.... 9. The question in this case arise is as to whether the depreciation amount of Rs. 46,666 relating to assessment year 1970-71 which could not be set off against the profits of the business of the subsequent years could be allowed while computing the business income of the assessee for the year under consideration. The Act provides the allowance of depreciation u/s. 32. Sub-sec. (2) of this secti....

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....allowed (2) Where, in the assessment of the assessee (or, if the assessee is a registered firm or an unregistered firm assessed as a registered firm, in the assessment of its partners) full effect cannot be given to any allowance under clause (i) or clause (ii) or clause (iia) or clause (iv) or clause (v) or clause (vi) of sub-section (1) or under clause (i) of sub-section (1A) in any previous yea....

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....for the provisions of sec 32(2) has to be allowed to be set off and carried forward under Chapter VI (secs. 72 to 80). The object of sec. 32(2) is to give a preferential treatment of the right to carry forward and set off for an unlimited period. We, therefore, agree with the learned counsel of the assessee that such preferential treatment should not be taken away from the assessee's normal right ....

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....ness loss. We are not impressed with the argument of the learned Departmental Representative that when the depreciation was allowed in assessment year 1970-71 it was allowed u/s. 32 which section is within section 28 to 43A and therefore prohibited by the non obstinate provision of sec. 44B. The reason is that section 44B does not deal with the carried forward loss of the earlier years and such lo....