M/s. Petrofils Co.Operative Ltd., Baroda V. The ACIT.,Circle-2(2), Baroda

ITA 1416/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9519 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 09-11-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 14-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKDIT NAGPAL
• Assessee Lawyers: J P SHAH
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 32; 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.1416/AHD/2013 / ASSTT. YEAR: 2006-2007 M/S.PETROFILS COOPERATIVE LTD. 201, PEARL TOWER PRAKRUTI RESIDENCY GOTRI ROAD, BARODA 390 015. PAN : AAAAAP 043 P VS ACIT, CIR.2(2) BARODA. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI J.P. SHAH, AR REVENUE BY : SHRI MUKDIT NAGPAL, SR.DR / DATE OF HEARING : 09/11/20167 / DATE OF PRONOUNCEMENT: 12/01/2017 $%/ O R D E R ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-II, BARODA DATED 12.2.2013 PASSED FOR THE ASSTT.YEAR 20 06-07. 2. THOUGH THE ASSESSEE HAS TAKEN FOUR GROUNDS OF AP PEAL, WHEREIN IT HAS RAISED NUMBER OF ARGUMENTS, BUT IN BRIEF, GRIEVANCE OF THE ASSESSEE IS WHETHER IT IS ENTITLED TO CLAIM CARRY FORWARD OF UNABSORBED DEPRECIATION OF EARLIER YEARS (I.E. PRIOR TO AMENDMENT CARRIED OUT IN SECTION 32 BY FINANCE ACT, 2001) TO SUBSEQUENT YEARS. 3. THE LD.AO HAS NOTICED THE DETAILS OF UNABSORBED BUSINESS LOSS AS WELL AS UNABSORBED DEPRECIATION. SUCH DETAILS ARE AS UN DER: A.Y. UNABSORBED BUSINESS LOSS UNABSORBED DEPRECIATION 1992-93 - 1367.82 ITA NO.1416/AHD/2013 2 1993-94 - 1321.41 1994-95 - 193.37 1995-96 1021.82 917.48 1996-97 616.65 4133.97 1997-98 4951.56 5637.53 1998-99 1543.36 2345.97 1999-00 4699.03 4377.36 2000-01 5233.51 202.86 2001-02 14885.04 181.59 2002-03 633.48 - 2003-04 162.29 -. 2004-05 145.42 - 2005-06 345.51 - TOTAL 34355.47 20679.36 4. ACCORDING TO THE AO, PRIOR TO AN AMENDMENT EFFEC TED IN SECTION 32(2) BY WAY OF FINANCE ACT, 2001, THE ASSESSEE WAS ENTIT LED FOR CARRY FORWARD OF DEPRECIATION FOR EIGHT SUBSEQUENT ASSESSMENT YEARS. HE WAS OF THE OPINION THAT AFTER AMENDMENT, DEPRECIATION AFTER A.Y.1997-9 8 COULD NOT BE CLAIMED FOR CARRY FORWARD. IN OTHER WORDS, THE AO WAS OF O PINION THAT DEPRECIATION UPTO A.Y.1997-98 AMOUNTING TO RS.13571.58 LAKHS IS NOT ALLOWABLE TO THE ASSESSEE FOR CARRY FORWARD. ITA NO.1416/AHD/2013 3 5. ON APPEAL, THE LD.CIT(A) HAS NOT RECORDED ANY IN DEPENDENT FINDING IN THIS YEAR. THE LD.CIT(A) HAS SIMPLY RELIED UPON HI S ORDER IN THE ASSTT.YEAR 2007-08 AND 2008-09. THE ASSESSEE HAS BROUGHT TO N OTICE OF THE LD.CIT(A), DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF GENERAL MOTORS INDIA P. LTD. VS. DCIT REPORTED IN 354 ITR 2 44 (GUJ). INSPITE OF THIS DECISION BEING BROUGHT TO NOTICE OF THE LD.CIT(A), HE DID NOT TAKE COGNIZANCE OF THE DECISION AND DID NOT ADJUDICATE THE ISSUE ON MERIT. TO MY MIND IT IS NOT A CORRECT STEP AT THE END OF THE LD.CIT(A). THE LD .CIT(A) OUGHT TO HAVE DEALT WITH THE DECISION OF THE HONBLE JURISDICTIONAL HIG H COURT AND IF IT IS NOT APPLICABLE TO THE CASE OF THE ASSESSEE ONLY THEN RE JECTED THE CLAIM OF THE ASSESSEE. I FIND THAT THIS DECISION IS SQUARELY AP PLICABLE ON THE FACTS OF THE PRESENT CASE. THE DISCUSSION MADE BY THE HONBLE J URISDICTIONAL HIGH COURT READS AS UNDER: 30. THE LAST QUESTION WHICH ARISES FOR CONSIDERATIO N IS THAT WHETHER THE UNABSORBED DEPRECIATION PERTAINING TO A .Y. 1997-98 COULD BE ALLOWED TO BE CARRIED FORWARD AND SET OFF AFTER A PERIOD OF EIGHT YEARS OR IT WOULD BE GOVERNED BY SECTION 3 2 AS AMENDED BY FINANCE ACT 2001? THE REASON GIVEN BY THE ASSESS ING OFFICER UNDER SECTION 147 IS THAT SECTION 32(2) OF THE ACT WAS AMENDED BY FINANCE ACT NO.2 OF 1996 W.E.F. A.Y. 1997-98 AND THE UNABSORBED DEPRECIATION FOR THE A.Y. 1997-98 COULD BE CARRIED FORWARD UP TO THE MAXIMUM PERIOD OF 8 YEARS FROM TH E YEAR IN WHICH IT WAS FIRST COMPUTED. ACCORDING TO THE ASSES SING OFFICER, 8 YEARS EXPIRED IN THE A.Y. 2005-06 AND ONLY TILL T HEN, THE ASSESSEE WAS ELIGIBLE TO CLAIM UNABSORBED DEPRECIAT ION OF A.Y. 1997-98 FOR BEING CARRIED FORWARD AND SET OFF AGAIN ST THE INCOME FOR THE A.Y. 2005-06. BUT THE ASSESSEE WAS NOT ENTI TLED FOR UNABSORBED DEPRECIATION OF RS.43,60,22,158/- FOR A. Y. 1997-98, WHICH WAS NOT ELIGIBLE FOR BEING CARRIED FORWARD AN D SET OFF AGAINST THE INCOME FOR THE A.Y. 2006-07. 31. PRIOR TO THE FINANCE ACT NO.2 OF 1996 THE UNABS ORBED DEPRECIATION FOR ANY YEAR WAS ALLOWED TO BE CARRY FORWARD INDEFI NITELY AND BY A DEEMING FICTION BECAME ALLOWANCE OF THE IMMEDIATELY SUCCEEDING YEAR. ITA NO.1416/AHD/2013 4 THE FINANCE ACT NO.2 OF 1996 RESTRICTED THE CARRY F ORWARD OF UNABSORBED DEPRECIATION AND SET-OFF TO A LIMIT OF 8 YEARS, FROM THE A.Y.1997-98. CIRCULAR NO.762 DATED 18.2.1998 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES (CBDT) IN THE FORM OF EXPLANA TORY NOTES CATEGORICALLY PROVIDED, THAT THE UNABSORBED DEPRECI ATION ALLOWANCE FOR ANY PREVIOUS YEAR TO WHICH FULL EFFECT CANNOT BE GI VEN IN THAT PREVIOUS YEAR SHALL BE CARRIED FORWARD AND ADDED TO THE DEPR ECIATION ALLOWANCE OF THE NEXT YEAR AND BE DEEMED TO BE PART THEREOF. 32. SO, THE UNABSORBED DEPRECIATION ALLOWANCE OF A. Y. 1996-97 WOULD BE ADDED TO THE ALLOWANCE OF A.Y. 1997-98 AND THE L IMITATION OF 8 YEARS FOR THE CARRY-FORWARD AND SET-OFF OF SUCH UNABSORBE D DEPRECIATION WOULD START FROM A.Y. 1997-98. 33. WE MAY NOW EXAMINE THE PROVISIONS OF SECTION 32 (2) OF THE ACT BEFORE ITS AMENDMENT BY FINANCE ACT 2001. THE SECTI ON PRIOR TO ITS AMENDMENT BY FINANCE ACT, 2001, READ AS UNDER:- WHERE IN THE ASSESSMENT OF THE ASSESSEE FULL EFFEC T CANNOT BE GIVEN TO ANY ALLOWANCE UNDER CLAUSE (II) OF SUB-SEC TION (1) IN ANY PREVIOUS YEAR OWNING TO THERE BEING NO PROFITS OR G AINS CHARGEABLE FOR THAT PREVIOUS YEAR OR OWING TO THE P ROFITS OR GAINS BEING LESS THAN THE ALLOWANCE, THEN, THE ALLOWANCE OR THE PART OF ALLOWANCE TO WHICH EFFECT HAS NOT BEEN GIVEN (HEREI NAFTER REFERRED TO AS UNABSORBED DEPRECIATION ALLOWANCE), AS THE CASE MAY BE,- (I) SHALL BE SET OFF AGAINST THE PROFITS AND GAINS, IF ANY, OF ANY BUSINESS OR PROFESSION CARRIED ON BY HIM AND ASSESS ABLE FOR THAT ASSESSMENT YEAR; (II) IF THE UNABSORBED DEPRECIATION ALLOWANCE CANNO T BE WHOLLY SET OFF UNDER CLAUSE (I), THE AMOUNT NOT SO SET OFF SHALL BE SET OFF FROM THE INCOME UNDER ANY OTHER HEAD, IF ANY, ASSES SABLE FOR THAT ASSESSMENT YEAR; (III) IF THE UNABSORBED DEPRECIATION ALLOWANCE CANN OT BE WHOLLY SET OFF UNDER CLAUSE (I) AND CLAUSE (II), THE AMOUN T OF ALLOWANCE NOT SO SET OFF SHALL BE CARRIED FORWARD TO THE FOLL OWING ASSESSMENT YEAR AND (A) IT SHALL BE SET OFF AGAINST THE PROFITS AND GAI NS, IF ANY, OF ANY BUSINESS OR PROFESSION CARRIED ON BY HIM AND ASSESS ABLE FOR THAT ASSESSMENT YEAR; ITA NO.1416/AHD/2013 5 (B) IF THE UNABSORBED DEPRECIATION ALLOWANCE CANNOT BE WHOLLY SO SET OFF, THE AMOUNT OF UNABSORBED DEPRECIATION A LLOWANCE NOT SO SET OFF SHALL BE CARRIED FORWARD TO THE FOLLOWIN G ASSESSMENT YEAR NOT BEING MORE THAN EIGHT ASSESSMENT YEARS IMM EDIATELY SUCCEEDING THE ASSESSMENT YEAR FOR WHICH THE AFORES AID ALLOWANCE WAS FIRST COMPUTED: PROVIDED THAT THE TIME LIMIT OF EIGHT ASSESSMENT YE ARS SPECIFIED IN SUBCLAUSE (B) SHALL NOT APPLY IN CASE OF A COMPANY FOR THE ASSESSMENT YEAR BEGINNING WITH THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SAID COM PANY HAS BECOME A SICK INDUSTRIAL COMPANY UNDER SUB-SECTION (1) OF SECTION 17 OF THE SICK INDUSTRIAL COMPANY (SPECIAL PROVISIONS) ACT, 1985 (1 OF 1986) AND ENDING WITH THE ASSESSMEN T YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE ENTIRE N ET WORTH OF SUCH COMPANY BECOMES EQUAL TO OR EXCEEDS THE ACCUMU LATED LOSSES. EXPLANATION.- FOR THE PURPOSES OF THIS CLAUSE, NET WORTH SHALL HAVE THE MEANING ASSIGNED TO IT IN CLAUSE (GA ) OF SUB- SECTION (1) OF SECTION 3 OF THE SICK INDUSTRIAL COM PANIES (SPECIAL PROVISIONS) ACT, 1985. 34. THE AFORESAID PROVISION WAS INTRODUCED BY FINAN CE (NO.2) ACT, 1996 AND FURTHER AMENDED BY THE FINANCE ACT, 2000. THE PROVISION INTRODUCED BY FINANCE (NO.2) ACT WAS CLARIFIED BY THE FINANCE MINISTER TO BE APPLICABLE WITH PROSPECT IVE EFFECT. 35. SECTION 32 (2) OF THE ACT WAS AMENDED BY FINANCE AC T, 2001 AND THE PROVISION SO AMENDED READS AS UNDER :- WHERE, IN THE ASSESSMENT OF THE ASSESSEE, FULL EFF ECT CANNOT BE GIVEN TO ANY ALLOWANCE UNDER SUB-SECTION (1) IN ANY PREVIOUS YEAR, OWING TO THERE BEING NO PROFITS OR G AINS CHARGEABLE FOR THAT PREVIOUS YEAR, OR OWING TO THE PROFITS OR GAINS CHARGEABLE FOR THAT PREVIOUS YEAR, OWING TO T HE PROFITS OR GAINS CHARGEABLE BEING LESS THAN THE ALLOWANCE, THE N, SUBJECT TO THE PROVISIONS OF SUB-SECTION (2) OF SECTION 72 AND SUB-SECTION (3) OF SECTION 73, THE ALLOWANCE OR THE PART OF THE ALL OWANCE TO WHICH EFFECT HAS NOT BEEN GIVEN, AS THE CASE MAY BE , SHALL BE ADDED TO THE AMOUNT OF THE ALLOWANCE FOR DEPRECIATI ON FOR THE FOLLOWING PREVIOUS YEAR AND DEEMED TO BE PART OF TH AT ALLOWANCE, OR IF THERE IS NO SUCH ALLOWANCE FOR THAT PREVIOUS YEAR, BE ITA NO.1416/AHD/2013 6 DEEMED TO BE ALLOWANCE OF THAT PREVIOUS YEAR, AND S O ON FOR THE SUCCEEDING PREVIOUS YEARS. 36. THE PURPOSE OF THIS AMENDMENT HAS BEEN CLARIFIE D BY CENTRAL BOARD OF DIRECT TAXES IN THE CIRCULAR NO.14 OF 2001. THE RELEVANT PORTION OF THE SAID CIRCULAR READS AS UNDER :- MODIFICATION OF PROVISIONS RELATING TO DEPRECIATIO N 30.1 UNDER THE EXISTING PROVISIONS OF SECTION 32 OF THE INCOME-TAX ACT, CARRY FORWARD AND SET OFF OF UNABSO RBED DEPRECIATION IS ALLOWED FOR 8 ASSESSMENT YEARS. 30.2 WITH A VIEW TO ENABLE THE INDUSTRY TO CONSERVE SUFFICIENT FUNDS TO REPLACE PLANT AND MACHINERY, SP ECIALLY IN AN ERA WHERE OBSOLESCENCE TAKES PLACE SO OFTEN, THE AC T HAS DISPENSED WITH THE RESTRICTION OF 8 YEARS FOR CARRY FORWARD AND SET OFF OF UNABSORBED DEPRECIATION. THE ACT HAS ALS O CLARIFIED THAT IN COMPUTING THE PROFITS AND GAINS OF BUSINESS OR PROFESSION FOR ANY PREVIOUS YEAR, DEDUCTION OF DEPRECIATION UN DER SECTION 32 SHALL BE MANDATORY. 30.3 UNDER THE EXISTING PROVISIONS, NO DEDUCTION FO R DEPRECIATION IS ALLOWED ON ANY MOTOR CAR MANUFACTUR ED OUTSIDE INDIA UNLESS IT IS USED (I) IN THE BUSINESS OF RUNN ING IT ON HIRE FOR TOURISTS, OR (II) OUTSIDE IN THE ASSESSEES BUSINES S OR PROFESSION IN ANOTHER COUNTRY. 30.4 THE ACT HAS ALLOWED DEPRECIATION ALLOWANCE ON ALL IMPORTED MOTOR CARS ACQUIRED ON OR AFTER 1ST APRIL, 2001. 30.5 THESE AMENDMENTS WILL TAKE EFFECT FROM THE 1ST APRIL, 2002, AND WILL, ACCORDINGLY, APPLY IN RELATION TO T HE ASSESSMENT YEAR 2002-03 AND SUBSEQUENT YEARS. 37. THE CBDT CIRCULAR CLARIFIES THE INTENT OF THE AMENDMENT THAT IT IS FOR ENABLING THE INDUSTRY TO C ONSERVE SUFFICIENT FUNDS TO REPLACE PLANT AND MACHINERY AND ACCORDINGLY THE AMENDMENT DISPENSES WITH THE RESTRICTION OF 8 Y EARS FOR CARRY FORWARD AND SET OFF OF UNABSORBED DEPRECIATION. THE AMENDMENT IS APPLICABLE FROM ASSESSMENT YEAR 2002-03 AND SUBS EQUENT YEARS. THIS MEANS THAT ANY UNABSORBED DEPRECIATION AVAILABLE TO ITA NO.1416/AHD/2013 7 AN ASSESSEE ON 1ST DAY OF APRIL, 2002 (A.Y. 2002- 0 3) WILL BE DEALT WITH IN ACCORDANCE WITH THE PROVISIONS OF SEC TION 32(2) AS AMENDED BY FINANCE ACT, 2001 AND NOT BY THE PROVISI ONS OF SECTION 32(2) AS IT STOOD BEFORE THE SAID AMENDMENT . HAD THE INTENTION OF THE LEGISLATURE BEEN TO ALLOW THE UNAB SORBED DEPRECIATION ALLOWANCE WORKED OUT IN A.Y. 1997-98 O NLY FOR EIGHT SUBSEQUENT ASSESSMENT YEARS EVEN AFTER THE AM ENDMENT OF SECTION 32(2) BY FINANCE ACT, 2001 IT WOULD HAVE IN CORPORATED A PROVISION TO THAT EFFECT. HOWEVER, IT DOES NOT CONT AIN ANY SUCH PROVISION. HENCE KEEPING IN VIEW THE PURPOSE OF AME NDMENT OF SECTION 32(2) OF THE ACT, A PURPOSIVE AND HARMONIOU S INTERPRETATION HAS TO BE TAKEN. WHILE CONSTRUING TA XING STATUTES, RULE OF STRICT INTERPRETATION HAS TO BE APPLIED, GI VING FAIR AND REASONABLE CONSTRUCTION TO THE LANGUAGE OF THE SECT ION WITHOUT LEANING TO THE SIDE OF ASSESSEE OR THE REVENUE. BUT IF THE LEGISLATURE FAILS TO EXPRESS CLEARLY AND THE ASSESS EE BECOMES ENTITLED FOR A BENEFIT WITHIN THE AMBIT OF THE SECT ION BY THE CLEAR WORDS USED IN THE SECTION, THE BENEFIT ACCRUING TO THE ASSESSEE CANNOT BE DENIED. HOWEVER, CIRCULAR NO.14 OF 2001 H AD CLARIFIED THAT UNDER SECTION 32(2), IN COMPUTING THE PROFITS AND GAINS OF BUSINESS OR PROFESSION FOR ANY PREVIOUS YEAR, DEDUC TION OF DEPRECIATION UNDER SECTION 32 SHALL BE MANDATORY. T HEREFORE, THE PROVISIONS OF SECTION 32(2) AS AMENDED BY FINANCE A CT, 2001 WOULD ALLOW THE UNABSORBED DEPRECIATION ALLOWANCE A VAILABLE IN THE A.Y. 1997-98, 1999-2000, 2000-01 AND 2001-02 TO BE CARRIED FORWARD TO THE SUCCEEDING YEARS, AND IF ANY UNABSOR BED DEPRECIATION OR PART THEREOF COULD NOT BE SET OFF T ILL THE A.Y. 2002-03 THEN IT WOULD BE CARRIED FORWARD TILL THE T IME IT IS SET OFF AGAINST THE PROFITS AND GAINS OF SUBSEQUENT YEARS. 38. THEREFORE, IT CAN BE SAID THAT, CURRENT DEPRECI ATION IS DEDUCTIBLE IN THE FIRST PLACE FROM THE INCOME OF TH E BUSINESS TO WHICH IT RELATES. IF SUCH DEPRECIATION AMOUNT IS LA RGER THAN THE AMOUNT OF THE PROFITS OF THAT BUSINESS, THEN SUCH E XCESS COMES FOR ABSORPTION FROM THE PROFITS AND GAINS FROM ANY OTHE R BUSINESS OR BUSINESS, IF ANY, CARRIED ON BY THE ASSESSEE. IF A BALANCE IS LEFT EVEN THEREAFTER, THAT BECOMES DEDUCTIBLE FROM OUT O F INCOME FROM ANY SOURCE UNDER ANY OF THE OTHER HEADS OF INCOME D URING THAT YEAR. IN CASE THERE IS A STILL BALANCE LEFT OVER, I T IS TO BE TREATED AS UNABSORBED DEPRECIATION AND IT IS TAKEN TO THE N EXT SUCCEEDING YEAR. WHERE THERE IS CURRENT DEPRECIATION FOR SUCH SUCCEEDING YEAR THE UNABSORBED DEPRECIATION IS ADDED TO THE CU RRENT ITA NO.1416/AHD/2013 8 DEPRECIATION FOR SUCH SUCCEEDING YEAR AND IS DEEMED AS PART THEREOF. IF, HOWEVER, THERE IS NO CURRENT DEPRECIAT ION FOR SUCH SUCCEEDING YEAR, THE UNABSORBED DEPRECIATION BECOME S THE DEPRECIATION ALLOWANCE FOR SUCH SUCCEEDING YEAR. WE ARE OF THE CONSIDERED OPINION THAT ANY UNABSORBED DEPRECIATION AVAILABLE TO AN ASSESSEE ON 1ST DAY OF APRIL 2002 (A.Y. 2002- 03) WILL BE DEALT WITH IN ACCORDANCE WITH THE PROVISIONS OF SEC TION 32(2) AS AMENDED BY FINANCE ACT, 2001. AND ONCE THE CIRCULAR NO.14 OF 2001 CLARIFIED THAT THE RESTRICTION OF 8 YEARS FOR CARRY FORWARD AND SET OFF OF UNABSORBED DEPRECIATION HAD BEEN DIS PENSED WITH, THE UNABSORBED DEPRECIATION FROM A.Y.1997-98 UPTO T HE A.Y.2001-02 GOT CARRIED FORWARD TO THE ASSESSMENT Y EAR 2002-03 AND BECAME PART THEREOF, IT CAME TO BE GOVERNED BY THE PROVISIONS OF SECTION 32(2) AS AMENDED BY FINANCE A CT, 2001 AND WERE AVAILABLE FOR CARRY FORWARD AND SET OFF AG AINST THE PROFITS AND GAINS OF SUBSEQUENT YEARS, WITHOUT ANY LIMIT WHATSOEVER. 39. FOR THE AFORESAID REASONS, THIS WRIT PETITION S UCCEEDS AND IS ALLOWED. THE NOTICE ISSUED UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961, DATED 29.3.2011 ANNEXURE A AN D THE ASSESSMENT ORDER DATED 27.12.2011 PASSED BY THE ASS ESSING OFFICER ANNEXURE F RESPECTIVELY TO THE WRIT PETITIO N ARE QUASHED. RULE IS MADE ABSOLUTE. THE PARTIES SHALL BEAR THEIR OWN COSTS. 6. RESPECTFULLY FOLLOWING THE DECISION OF THE HONB LE HIGH COURT, I DIRECT THE AO TO ALLOW CARRY FORWARD OF DEPRECIATION WHICH HAS NOT BEEN ALLOWED TO THE ASSESSEE BECAUSE UNABSORBED DEPRECIATION UPTO 1 997-98 WOULD BECOME DEPRECIATION OF THE CURRENT YEAR AND IT IS TO BE TR EATED IN ACCORDANCE WITH LAW. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 12 TH JANUARY, 2017 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER