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2013 (7) TMI 998 - AT - Income TaxUn-absorbed depreciation - Held that:- AO and the FAA have not considered the amended provisions of the Sec.32(2) of the Act in right perspective. Perusal of provisions of section 32 show that prior to 01- 04-1997,un-absorbed depreciation of the previous year used to be claimed as current depreciation and would be allowed to be set-off against income from any other head. By an amendment to the provisions of Section 32(2) of the Act, w.e.f. 01-04-1997,treatment of un-absorbed depreciation underwent a change-because as per the amended provisions un-absorbed depreciation was no longer deemed to be part of current depreciation and the period available for set-off of such unabsorbed depreciation from profits of subsequent years was restricted to eight years. It is noteworthy that during earlier period(up to 31.03.1997) no such time limit was prescribed. Vide finance Act,2001 the provisions of Section 32(2)were once again amended and a result the position as it existed prior to 01-04-1997 was restored back. From the amendments to Finance Act,2001 it is clear that legislative intent was to allow un-absorbed depreciation to be carried forward beyond period of eight years. For the AY under consideration, correct law applicable was the law that prevailed as on the first day of April of that AY. In our opinion during the assessment year under consideration, amended provisions were applicable and AO was supposed to calculate the un-absorbed depreciation as required by the Act. In our opinion, there was no bar to allow the un-absorbed depreciation of the earlier years in the AY 2007-08 - Decided in favour of the assessee-company.
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