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2008 (6) TMI 376 - AT - Income TaxInterpretation of the Statutes - Unabsorbed depreciation - Set off brought forward - short-term capital gains - AO disallowed the claim of set off b/f unabsorbed depreciation against STCG by relying on the provisions of section 32(2) as applicable from AY 1997-98 to AY 2000-01 - CIT(A) directed the AO to allow the claim. HELD THAT:- The Hon’ble Supreme Court in the case of Kerala State Industrial Development Corporation v. CIT [2002 (11) TMI 8 - SUPREME COURT] held:- ‘That the Finance Minister’s speech can be relied upon to throw light on the object and purpose of the particular provisions introduced by the Finance Bill has been recognized by this Court in K.P. Varghese v. ITO [1981 (9) TMI 1 - SUPREME COURT]. Having regard to the clarification given by the Finance Minister in his Speech delivered while moving the Finance (No. 2) Bill, 1996 in the Lok Sabha and giving harmonious meaning and reasoning to the amended section 32(2) brought into effect on and from 1-4-1997, we are of the considered view that the depreciation allowance allowed to the assessee up to and inclusive AY 1996-97 which remained unabsorbed and is brought forward to the AY 1997-98 and subsequent assessment years up to assessment year 2004-05 can be set-off as per pre-amended section 32(2) and, consequently, it can, be set-off against taxable business profits or income under any other head for assessment year 1997-98 and seven subsequent assessment years. Therefore, the assessee’s claim, to set- off unabsorbed depreciation brought forward from (AY 1995-96 and 1996-97 against income under ‘House Property’ for the AY 1998-99 is to be allowed, and, we order accordingly. Consequently, the issue involved in the Gross Objection filed by the assessee is decided in favour of the assessee. Before parting with the issue, we may put it on record that we have noticed a decision where a similar view has been taken by the ITAT in the case of ITO v. Selchem Engineers (P.) Ltd.[2004 (4) TMI 273 - ITAT DELHI-A]. ITAT in the case of Jt. CIT v. India Steamship Co. Ltd.[2002 (7) TMI 226 - ITAT CALCUTTA-E], which was later followed by ITAT, in the case of Poddar Udyog Ltd. [2004 (10) TMI 266 - ITAT CALCUTTA-A], has also taken the similar view. Therefore, we are of the view that the order of learned CIT(A) has to be upheld. Accordingly, the same is upheld and the appeal by the revenue is dismissed.
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