Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2014 (6) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (6) TMI 149 - HC - Income TaxValidity of reopening of assessment – Mere change of opinion - Carry forward of unabsorbed depreciation beyond eight years – Assessee contended that allowing the depreciation pertaining to earlier years had remained unabsorbed was examined by the AO during the course of original scrutiny assessment - Any attempt on his part to revisit the issue would be based on mere change of opinion - Held that:- Following General Motors India P. Ltd. v. Deputy CIT [2012 (8) TMI 714 - GUJARAT HIGH COURT] - carry forward of unabsorbed depreciation and set off would be permissible without reference to any time limit - notice was issued beyond the period of four years from the end of the relevant AY - depreciation is deductible in the first place from the income of the business to which it relates - If such depreciation amount is larger than the amount of the profits of that business, then such excess comes for absorption from the profits and gains from any other business or business, if any, carried on by the assessee - If a balance is left even thereafter, that becomes deductible from out of income from any source under any of the other heads of income during that year - In case there is a still balance left over, it is to be treated as unabsorbed depreciation and it is taken to the next succeeding year. Where there is current depreciation for succeeding year the unabsorbed depreciation is added to the current depreciation for such succeeding year and is deemed as part thereof - there is no current depreciation for such succeeding year, the unabsorbed depreciation becomes the depreciation allowance for such succeeding year - any unabsorbed depreciation available to an assessee on 1st day of April 2002 (A.Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001 - once the Circular No.14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from A.Y.1997- 98 upto the A.Y.2001- 02 got carried forward to the AY 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 were available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever - when the ground on which notice is founded is held to be invalid in law, thus, the very foundation for issuance of notice would not survive – Decided in favour of Assessee.
|