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2014 (1) TMI 802 - AT - Income TaxCarry forward and set off of unabsorbed depreciation of preceding years - Held that:- Following CIT v. Virmani Industries (P.) Ltd. [1995 (10) TMI 1 - SUPREME Court] - As per section 32(2) - The depreciation allowance for the current year to which full effect cannot be given due to the paucity of profit, has been referred to as "Unabsorbed depreciation allowance" - This is so that unabsorbed depreciation allowance for the assessment years 1997-98 to 2001-02 strictly comes under section 32(2) with a special name and character of 'Unabsorbed depreciation allowance' changing its situation from section 32(1) - The purpose of legal fiction in section 32(2) is to make the unabsorbed carried forward depreciation partake the same character as the current depreciation in the following year - The object of the provision is to treat the whole or part of the depreciation allowance under section 32(1), which could not be adjusted in the first year, as the current depreciation under section 32(1) in the second year and so on - Decided in favour of assessee.
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