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2008 (1) TMI 441 - AT - Income TaxSetting off the unabsorbed depreciation relating to earlier years against income from house property - Whether the unabsorbed depreciation relating to AY 1999-2000 is to be dealt with in accordance with the provisions of section 32(2) as applicable to assessment year 1999-2000 - HELD THAT:- It is well-settled that the law applicable to any assessment is the law that prevails as on the first day of April of the relevant assessment year and as held in the case of CIT v. Craigmore Plantations India Ltd.[2001 (6) TMI 19 - MADRAS HIGH COURT], it is the duty of the AO to apply the law as it stood on the first April of the relevant assessment year. In the present case, the assessment year involved is 2003-04 and therefore, the provisions of section 32(2) as existed in the statute as on 1-4-2003 would be applicable to decide the treatment to be given to unabsorbed depreciation while allowing the same to be set off against the income for assessment year 2003-04. In the present context, the facts involved are different inasmuch as the amendment made in section 32(2) with effect from 1-4-2002 restoring the position as it existed prior to 1-4-1997 is apparently beneficial to the assessees and the same does not seem to have caused any hardship to the assessees in general and therefore, the question of giving any benefit to the assessee in accordance with the pre-amended provisions of section 32(2) which are not applicable to the year under consideration cannot arise. Thus, we are, therefore, of the view that the issue relating to setting off the unabsorbed depreciation against the income for the year under consideration i.e., assessment year 2003-04 is required to be considered and decided in accordance with the provisions of section 32(2) as amended with effect from 1-4-2002 by the Finance Act, 2001 which are applicable to that year. In that view of the matter, we uphold the impugned order of the learned CIT(A) on this issue and dismiss ground No. 1 of the assessee's appeal. The issues raised in ground No. 2 relating to charging of interest under section 234A, 234B, 234C and 234D are merely consequential in nature - dismissing ground No. 1 on merits, this ground of the assessee is therefore dismissed. In the result, the appeal of the assessee is dismissed.
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