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2008 (9) TMI 871 - HC - Income TaxDisallowance of carried forward unabsorbed depreciation and unabsorbed investment allowance - Held that:- When the returns of income for the two years under consideration were filed and the returns taken up for processing under section 143(1)(a) of the Act there was no finality as to the true scope of the provisions of section 115J(2) of the Act so as to warrant disallowance of carried forward unabsorbed depreciation and unabsorbed investment allowance by reducing the figure on the basis of the only the Central Board of Direct Taxes circular. In the result, it is apparent that the respondent authorities could not have undertaken the exercise of disallowance of carried forward unabsorbed depreciation and unabsorbed investment allowance of earlier years by way of prima facie adjustment for the two years in question. Once that exercise was not permissible the consequential orders made under section 154 of the Act and section 264 of the Act cannot be sustained. Accordingly, intimations under section 143(1)(a) of the Act both dated July 8, 1992 (exhibits A and B), orders under section 154 of the Act dated September 22, 1992 (exhibits D and E), and order under section 264 of the Act dated December 31, 1992 (exhibit I), are hereby quashed and set aside.
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