Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2016 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (9) TMI 69 - HC - Income TaxCalculation of deduction under Chapter VI-A - Tribunal held that depreciation, whether claimed or not, has to be foisted upon the assessee even prior to insertion of Explanation 5 to S.32 (1) of the Act with effect from 01/04/2002 - Held that:- While deciding the matter, in the case of Seshasayee Paper and Board Ltd. v. Deputy Commissioner of Income-Tax, (2015 (5) TMI 590 - SUPREME COURT ), the Supreme Court observed that once the entire depreciation, namely, the unabsorbed depreciation allowance of the previous year gets merged into the depreciation of the current year, it would become an integral part thereof. Legal fiction makes it one whole thereby making it possible for the assessee to claim set-off of unabsorbed carried forward depreciation as well. Once the unabsorbed carried forward depreciation has become a part of the depreciation of the current year, it is not open to the assessee to bifurcate the two again and exercise its choice to claim the depreciation of the current year under Section 32 (1) of the Act taking a position that since unabsorbed depreciation of the previous years is not claimed, it cannot be thrust upon the assessee. Applying this ratio, in our view, the Tribunal has committed an error while passing the impugned order and it is held that the depreciation, whether claimed or not, cannot be foisted upon the assessee even prior to insertion of Explanation 5 to S.32 (1) of the Act with effect from 01/04/2002, while calculating deduction under Chapter VI-A of the Act. Accordingly, this appeal is allowed. The question posed for our consideration is answered in favour of the assessee and against the revenue.
|