TMI Blog1994 (8) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of compensation received by the assessee in respect of its business assets taken over by the Central Government fell short of their written down value. So, the assessee claimed the loss as terminal depreciation under section 32(1)(iii) of the Income-tax Act, 1961. From the order of assessment for the assessment year 1980-81 it is clear that the assessee claimed adjustment of unabsorbed depreciation and loss for the earlier years which could not be allowed as no such depreciation or loss could be determined in the earlier years. Against the said observation of disallowance the assessee preferred an appeal before the CIT(A). By order dated 14-8-1984 the matter was remanded by the first appellate authority to the Assessing Officer with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Ltd. [1991] 192 ITR 252 (Cal.), T. S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 (SC) and Oriental Cotton Corpn. Mills Ltd. v. CIT [1993] 202 ITR 370 (Cal.). It was further submitted on behalf of the assessee that section 32(2) or any other provision of the Act does not specifically put a bar on the carry-forward and set-off of balancing allowance under section 32(1)(iii). It was further contended on behalf of the assessee that the order passed by the Assessing Officer initially was merged with the order of the CIT(A) dated 14-8-1984 and so the same order could not be rectified subsequently by the Assessing Officer by an order under section 154 of the Act. 4. On behalf of the revenue, reliance-was placed upon the order passed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid situation, proceeding under section 154 was initiated by the Assessing Officer for the purpose of rectification of the said mistake which in the present situation appears to the reasonable and, in our opinion, the issue is not a debatable one as contended on behalf of the assessee. There is no dispute that depreciation allowance under section 32(1) can be allowed when the building, machinery, etc., are owned by the assessee and used for the purpose of business. Admittedly, in the present case, the assets of the assessee were no more in use or not owned by it as the aforesaid assets were taken over by the Government and the assessee already received compensation for the same. In the aforesaid situation, section 32(1) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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