CIT v. Bhima Sahakari Sakhar Karkhana Ltd.

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The Tax PublishersSpecial Leave to Appeal (c) No (s). 25475 of 2018
2021 TaxPub(DT) 0389 (SC) : (2020) 275 TAXMAN 0390

INCOME TAX ACT, 1961

Sections 261 & 32(2)

Where the Department preferred SLP to appeal against the order of Bombay High Court in CIT v. Bhima Sahakari Sakhar Karkhana Ltd. [ITA No. 1054 of 2015, dt. 20-2-2018] : 2021 TaxPub(DT) 388 (Bom-HC), whereby the High Court held that as per CBDT Circular No. 14/001, dt. 22-11-2001, any unabsorbed depreciation, which is available on 1-4-2001 would be dealt with in accordance with provisions of section 32(2) as amended by the Finance Act, 2001, moreover, said circular clarifies that restriction of eight years to carry forward and set off the unabsobed depreciation has been dispensed with, consequently, the Tribunal was justified in allowing unabsorbed depreciation for assessment year 1995-96 to be carried forward and set off against future profits beyond eight years, i.e., assessment year 2004-05 holding amendment by the Finance Act, 2001 and CBDT Circular No. 14/2001 was applicable retrospectively, the Supreme Court considering the fact that Revenue sought to withdraw SLP filed against Order of High Court due to low tax effect, dismissed the SLP as withdrawn, leaving question of law open.

Appeal (Supreme Court) - Special leave petition - Depreciation - Unabsorbed depreciation--Allowability--Carry forward and set-off against future profits beyond eight years

Department preferred SLP to appeal against the order of Bombay High Court in CIT v. Bhima Sahakari Sakhar Karkhana Ltd. [ITA No. 1054 of 2015, dt. 20-2-2018] : 2021 TaxPub(DT) 388 (Bom-HC), whereby the High Court held that as per CBDT Circular No. 14/001, dt. 22-11-2001, any unabsorbed depreciation, which is available on 1-4-2001 would be dealt with in accordance with provisions of section 32(2) as amended by the Finance Act, 2001, moreover, said circular clarifies that restriction of eight years to carry forward and set off the unabsobed depreciation has been dispensed with, consequently, the Tribunal was justified in allowing unabsorbed depreciation for assessment year 1995-96 to be carried forward and set off against future profits beyond eight years, i.e., assessment year 2004-05 holding amendment by the Finance Act, 2001 and CBDT Circular No. 14/2001 was applicable retrospectively. Held: Counsel for the petitioner, on instructions, issued by the Department of Revenue, Ministry of Finance vide F.No. 390/Misc./116/2017-JC, dated 22-8-2019, sought permission to withdraw this Special Leave Petition along with pending applications therein due to low tax effect. Permission was granted, subject to just exceptions. The SLP and pending applications were dismissed as withdrawn, leaving question of law open.