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2016 (5) TMI 1138 - AT - Income TaxCarried forward depreciation and loss - CIT(A) allowing the business loss to set off against the income of assessment year 2001-02 i.e. beyond eight years without appreciating the provisions of section 72(3) of the Act - whether the mistake committed by the auditor in the assessment year 2000-01 can be rectified in the assessment year 2001-02? - Held that:- AO while framing the assessment on the assessee should apply the provisions of the income tax act correctly. The assessee should not be deprived from the benefit of the provisions of the income tax act on account on the mistake committed by the auditor of the company. In this connection we are also putting our reliance in the decision of Hon’ble Supreme Court in the case of CIT v. Manmohan Das (1965 (11) TMI 33 - SUPREME Court ) wherein has held whether the loss in any year may be carried forward to the following year and set off against the profits and gains of the subsequent year under section 24(2) has to be determined by the Income-tax Officer who deals with the assessment of the subsequent year. A decision recorded by the Income-tax Officer who computes the loss in the previous year that the loss cannot be set off against the income of the subsequent year is not binding on the assessee. Relying on the aforesaid judgments, we have no hesitation in upholding the order of learned CIT(A). Whether unabsorbed depreciation up to the Assessment Year 1996-97 will be added to the depreciation allowance of 1997-98 and that such unabsorbed depreciation could be carried forward for set off for a maximum period of eight years from the Assessment year 1997- 98 - Held that:- 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. And 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 assessment year 1997-98 up to the assessment year 2001- 02 got carried forward to the assessment year2002-03 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 yeas, without any limit whatsoever.
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