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2017 (5) TMI 155 - AT - Income TaxSet-off of unabsorbed depreciation - scope of rectification u/s 154 - whether the unabsorbed depreciation, which remained to be adjusted beyond Assessment Year 2001-02, be allowed to set off in perpetuity or the maximum period is 8 years? - Held that- whether or not the amendment to Sec. 32 of the Act, has prospective or retrospective effect on the application of the current year’s depreciation and unabsorbed business loss and depreciation for the purpose of computation of income tax, is a disputed question of law and the Hon’ble Supreme Court in the case of T.S. Balram vs Wockhardt Brothers [1971 (8) TMI 3 - SUPREME Court] has held that such disputed questions do not fall in the category of ‘mistake apparent from record’, as such, such matters will not be available for rectification u/s 154 of the Act. Placing reliance on the decision of the jurisdictional High Court in the case of General Motor India [2012 (8) TMI 714 - GUJARAT HIGH COURT], the ld. CIT(A) held that Any unabsorbed depreciation available to the 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 A.Y 1997-98 upto the A.Y 2001-02 got carried forward to the assessment year 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. The ld. CIT(A) was perfect in his reasoning basing on the binding precedents and we do not see any illegality or irregularity in the finding reached by ld. CIT(A) on this aspect - appeal dismissed - decided against Revenue.
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