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2018 (11) TMI 1335 - HC - Income TaxEntitlement to the benefit u/s 10B - deduction of export profit for 100% export oriented industrial unit - benefit of set off of unabsorbed depreciation for Asst.Years 1994-95 to 1996-97 against the assessable income for the AY 2001-02, 2002-03, 2004-05 and 2006-07? - deduction not claimed for a particular year - Held that:- When there is a tax holiday provided for ten consecutive assessment years to 100% EOUs, among others, depreciation, which is the specific subject matter of the present appeals, would be deemed to have been claimed and allowed in the relevant assessment year in which there is eligible a tax holiday. The contention of the assessee that when deduction under Section 10B is not claimed for a particular year, then necessarily there should be permitted a carry forward of unabsorbed depreciation, since sub-section (6) of Section 10B would only be applicable if there is a deduction claimed under the beneficial provision has to be accepted since, when a claim under Section 10B is made in a relevant year; the claim for depreciation arising in that year alone would be deemed to have been allowed, giving the provision for set off full effect. The unabsorbed depreciation carried forward from the earlier years would be permitted set off against any other income or allowed to be carried forward. The unabsorbed depreciation claimed by the assessee is of the earlier years, when there was no claim made under Section 10B. Such unabsorbed depreciation is permitted carry forward in the subsequent years. What is deemed to be allowed, in any relevant year, in which deduction under Section 10B is claimed, is the depreciation arising in that year. The unabsorbed depreciation carried forward to the relevant year, from any year in which Section 10B was not claimed, remains untouched and could be set off against any income, for which Section 10B deduction is not permissible and also could be carried forward to the next years, if not fully set off against other incomes. The prohibition in carry forward is only to the depreciation claim arising in that relevant year; wherein a deduction is claimed under Section 10B; which stands totally effaced by reason of the deeming provision; on applying Section 10B deduction. - Decided in favour of assessee.
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