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2017 (12) TMI 881 - AT - Income TaxSet off of brought forward unabsorbed depreciation denied - Held that:- Circular No. 14 of 2001 had clarified that under Section 32(2), in computing the profits and gains of business or profession for any previous year, deduction of depreciation under Section 32 shall be mandatory. Therefore, the provisions of section 32(2) as amended by Finance Act, 2001 would allow the unabsorbed depreciation allowance available in the A.Y. 1995-96 to 2001-01, to be carried forward to the succeeding years, and if any unabsorbed depreciation or part thereof could not be set off till the A.Y. 2002-03 then it would be carried forward till the time it is set off against the profits and gains of subsequent years. Where there is current depreciation for such succeeding year the unabsorbed depreciation is added to the current depreciation for such succeeding year and is deemed as part thereof. If, however, there is no current depreciation for such succeeding year, the unabsorbed depreciation becomes the depreciation allowance for such succeeding year.Therefore, considering the factual position discussed above, we allow the appeal of the assessee and we direct the AO to allow set off, of depreciation pertaining to A.Y 1995-96 to 2000-01, against income of assessment year 2009-10. - Decided in favour of assessee.
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