TMI Blog2008 (1) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... ame 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epreciation for assessment year 1999-2000 was available for set off only against the business income and the same, therefore, could not have been set off against income from house property for the year under consideration as done by the Assessing Officer. This submission of the assessee was not found acceptable by the learned CIT(A). According to him, while framing the assessment for assessment year 2003-04, the provisions of section 32(2) as applicable to that year were liable to be taken into account by the Assessing Officer and since as per the provisions of section 32(2) so applicable, the unabsorbed depreciation for earlier years was liable, to be set off against income under any head, he held that the Assessing Officer was fully justified in setting off the unabsorbed depreciation relating to assessment year 1999-2000 against income from house property for the year under consideration. He accordingly upheld the action of the Assessing Officer on this issue. 4. Before us, the learned DR relied on the orders of the authorities below in support of the revenue's case. The learned counsel for the assessee, on the other hand, mainly reiterated the submissions made on behalf of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount not so set off be set off from the income under any other head, if any, assessable for that assessment year; (iii) if the unabsorbed depreciation allowance cannot, be wholly set off under clause (i) and clause (ii), the amount of allowance not so set off shall be carried forward to the following assessment year and- (a) it shall be set off against the profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year; (b) if the unabsorbed depreciation allowance cannot be wholly so set off, the amount of unabsorbed depreciation allowance not so set off shall be carried forward to the following assessment year not being more than eight assessment years immediately succeeding the assessment year for which the aforesaid allowance was first computed: Provided that the business or profession for which the allowance was originally computed continued to be carried on by him in the previous year relevant for that, assessment year: Provided further that the time-limit of eight assessment years specified in sub-clause (b) shall not apply in the case of a company for the assessment year beginning with the assessment year re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereby the position as it existed prior to 1-4-1997 was restored. 7. In the present case involving assessment year 2003-04, the dispute is whether the unabsorbed depreciation relating to assessment year 1999-2000 is to be dealt with in accordance with the provisions of section 32(2) as applicable for assessment year 1999-2000 as claimed by the assessee or the same has to be dealt with in accordance with the said provisions as applicable to assessment year 2003-04 as claimed by the revenue. 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 by Hon'ble Madras High Court in the case of CIT v. Craigmore Plantations India Ltd. [2002] 253 ITR 447, it is the duty of the Assessing Officer 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. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable for assessment year 1996.97 was reinstated from assessment year 2002-03. The Tribunal also relied on the speech of the Finance Minister delivered at the time of presenting the Budget in the Parliament as well as the CBDT Circular No. 762, dated 18-2-1998 assuring that the benefit available to the assessee in respect of unabsorbed depreciation up to assessment year 1996-97 would not be taken away and the same will be allowed by dealing with such depreciation in accordance with the law as it existed prior to 1-4-1997. 10. It is observed that a somewhat similar issue arose for consideration before the ITAT Delhi Bench in the case of ITO v. Selchem Engineers (P.) Ltd. [2004] 90 ITD 732 wherein the issue was about the setting off of unabsorbed depreciation relating to earlier years against the income for assessment year 1997-98 and the dispute was whether the same was to be done in accordance with the provisions of section 32(2) as amended from assessment year 1997-98 or as per the pre-amended provisions of section 32(2) applicable up to assessment year 1996-97. In this context, a reference was made by the Tribunal to the provisions of section 32(2) prior to amendment made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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