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The Tax Publishers2021 TaxPub(DT) 3932 (Mad-HC) : (2021) 436 ITR 0534 : (2021) 283 TAXMAN 0013 INCOME TAX ACT, 1961
Section 32(2)
Any unabsorbed depreciation available to an assessee on 1-4-2002 (assessment year 2002-03) would be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001, and once Circular No. 14 of 2001 clarified that restriction of 8 years for carry forward and set-off of unabsorbed depreciation had been dispensed with, unabsorbed depreciation from assessment year 1997-98 up to assessment year 2001-02 got carried forward to assessment year 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act, 2001 and was available for carry forward and set-off against the profits and gains of subsequent years, without any limit, whatsoever.
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Depreciation - Unabsorbed depreciation - Scope for carry forward beyond eight years -
Question arose for consideration was whether assessee was entitled to carry forward unabsorbed depreciation pertaining to assessment years 1997-98 and 1998-99 and set off against the income of assessment year 2007-08 which was beyond the period of eight assessment years, in the light of amendment with effect from assessment year 1997-98 putting a cap of eight years for carry forward of depreciation.Held: Any unabsorbed depreciation available to an assessee on 1-4-2002 (assessment year 2002-03) would be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001, and once Circular No. 14 of 2001 clarified that restriction of 8 years for carry forward and set-off of unabsorbed depreciation had been dispensed with, unabsorbed depreciation from assessment year 1997-98 up to assessment year 2001-02 got carried forward to assessment year 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act, 2001 and was available for carry forward and set-off against the profits and gains of subsequent years, without any limit, whatsoever.
Followed:2021) 127 Taxmann.com 805 (Mad-HC) : 2021 TaxPub(DT) 0286 (Mad-HC), Harvey Heart Hospitals Ltd. v. Asstt. CIT) and (2020) 122 Taxmann.com 212 (Mad) (CIT, Chennai v. Sanmar Speciality Chemicals Ltd.).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2007-08
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