ITO Corporate Ward 3(2), CHENNAI V. TTG Industries Private Ltd., CHENNAI

ITA 1934/CHNY/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2277 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 14-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G JOHNSON
• Keywords: Business income; Depreciation; Unabsorbed depreciation; Set aside; Capital Gains
• Section: 201; 73; 72; 22; 32

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI . , , BEFORE SHRI DUVVURU RL REDDY , JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBE R ./ ITA NO.1934/CHNY/2018 /ASSESSMENT YEAR: 2006-07 THE INCOME TAX OFFICER, CORPORATE WARD-3(2), CHENNAI. VS. M/S. TTG INDUSTRIES PVT. LTD., OLD NO.672, NEW NO.476, TEMPLE TOWER III FLOOR, ANNA SALAI, NANDANAM (MOUNT ROAD), CHENNAI 600 035. [PAN: AAACT 6106F] ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI G. JOHNSON, ADDL. CIT /RESPONDENT BY : SHRI SAROJ KUMAR PARIDA, ADVOCATE /DATE OF HEARING : 23.03.2021 / DATE OF PRONOUNCEMENT : 29.04.2021 / O R D E R PER SHRI S. JAYARAMAN, ACCOUNTANT MEMBE R : THE REVENUE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-11, CHENNAI, I N ITA NO.150/16- 17 DATED 28.03.2018 FOR THE ASSESSMENT YEAR 2006-07 WITH THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS IN LAW AND OPPOSED TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2.1 THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSES SING OFFICER TO ALLOW THE ASSESSEES CLAIM OF UNABSORBED DEPRECIATION TO THE TUNE OF RS.4,22,88,026/-. ITA NO.1934/CHNY/2018 :- 2 -: 2.2 THE LEARNED C1T(A) ERRED IN RELYING UPON THE DE CISION OF THE GUJARAT HIGH COURTS DECISION IN THE CASE OF M/S.GENERAL MO TORS INDIA P. LTD. 2.3 THE LD. CIT(A) OUGHT TO HAVE RELIED UPON THE DE CISION OF THE HONBLE SUPREME COURT IN THE CASE OF M/S.PEERLESS GENERAL F INANCE INVESEMTNE CO. LTD., WHEREIN IT HAS BEEN HELD THAT THE UNABSOR BED DEPRECIATION COULD BE SET OFF ONLY AGAINST THE BUSINESS INCOME FOR A P ERIOD OF EIGHT YEARS. 3. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT (A) MAY BE SET ASIDE AND THAT OF THE ASSESSING. OFFICER BE RESTORED. 2. THE CASE WAS HEARD THROUGH VIDEO CONFERENCING. T HE LD. DR SUBMITTED THAT WHILE MAKING THE ASSESSMENT FOR THE A.Y 2006-07, THE A.O HAD NOT ALLOWED THE SET OFF OF CARRY FORWARD DE PRECIATION LOSS PERTAINING TO A.YS 1996-97 TO 1999-2000. THE ASSESS EE SOUGHT RECTIFICATION U/S. 154, WHICH WAS REJECTED BY THE A .O. THE A.O SPECIFICALLY REJECTED THE SET OFF OF UNABSORBED DEPRECIATION LOS S PERTAINING TO A.Y. 1997-98 AGAINST THE TAXABLE INCOME FOR A.Y 2006-07. THE A.O. HAD ALSO REJECTED THE CONTENTION OF THE ASSESSEE THAT IT WAS A SICK COMPANY AND THAT THE SECOND PROVISO TO S. 32(2) OF THE INCOME T AX ACT, 1961 (IN SHORT THE ACT) WAS NOT APPLICABLE TO IT. AGGRIEVED, TH E ASSESSEE FILED AN APPEAL BEFORE CIT(A). THE LD. CIT(A) ALLOWED THE A PPEAL. AGGRIEVED AGAINST THAT ORDER, THE REVENUE FILED THIS APPEAL A ND PRESENTED THE CASE ON THE LINES OF GROUNDS OF APPEAL EXTRACTED, SUPRA. 4. PER CONTRA, THE LD. A.R SUBMITTED THAT THE HONB LE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SANMAR SPECIALITY CHEMICALS LTD. TCA 358 OF 2018 (MAD) DATED 14.09.2020 AFTER CONSID ERING THE DECISIONS RELIED ON BY THE REVENUE AND VARIOUS DECISIONS OF T HE HON'BLE HIGH ITA NO.1934/CHNY/2018 :- 3 -: COURTS AND THE DECISION OF THE HON'BLE SUPREME COURT DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND THEREFORE, PLEADED TH AT THE REVENUES APPEAL MAY BE DISMISSED APPLYING THIS HONBLE JURIS DICTIONAL HIGH COURTS DECISION. 5. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIAL. THE RELEVANT PORTION OF THE ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT RELIED ON BY THE LD. A.R, SUPRA, IS EXTR ACTED AS UNDER: 4. THE SHORT ISSUE, WHICH FALLS FOR CONSIDERATION, IS A S TO WHETHER, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS RIGHT IN PERMITTING THE ASSESSEE TO CARRY FORWARD THE DEPRECIATION LOSS PERTAIN ING TO THE ASSESSMENT YEAR 1997-98 TO THE PRESENT ASSESSMENT YEAR NAMELY 2006-07, WH ICH IS BEYOND THE EIGHT YEAR PERIOD MANDATED UNDER THE PROVISIONS OF S ECTION 32 OF THE ACT. 5. THE REVENUE IS BEFORE US BY REFERRING TO THE DECISION OF THE HIGH COURT OF CALCUTTA IN THE CASE OF PEERLESS GENERAL FINANCE & INVESTMENT CO. LTD. VS. CIT [(2016) 73 TAXMANN.COM 257) AND SUBMITTING THAT AN IDENTICAL ISSUE WAS CONSIDERED BY THE CALCUTTA HIGH COURT WHEREIN THE ASSE SSEE WAS NOT GRANTED RELIEF. IT IS FURTHER SUBMITTED THAT THE SAID DECISION OF THE CALCUTTA HIGH COURT WAS TESTED FOR ITS CORRECTNESS BY THE HON'BLE SUPREME COU RT AND THE SPECIAL LEAVE PETITION FILED AGAINST THE JUDGMENT OF THE CALCUTTA HIGH COURT WAS DISMISSED IN THE DECISION REPORTED IN (2016) 73 TAXMANN.COM 258. 6. AFTER ELABORATELY HEARING THE LEARNED SENIOR STAN DING COUNSEL APPEARING FOR THE APPELLANT REVENUE, WE ARE OF THE CONSIDERED OPINION THAT THE RELIANCE PLACED ON THE DECISION IN THE CASE OF PEERLESS GENERAL FINANCE & INVESTMENT CO. LTD., WOULD, IN NO MANNER, ASSIST THE CASE OF THE REVENUE. WE SAY SO AFTER REFERRING TO CIRCULAR NO.14/2001 DATED 2 2.11.2002 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, WHICH ARE EXPLANATORY NO TES ON PROVISIONS RELATING TO DIRECT TAXES. PARAGRAPH 30 OF THE SAID CIRCULAR DEA LS WITH MODIFICATION OF PROVISIONS RELATING TO DEPRECIATION. 7. FOR BETTER APPRECIATION, WE QUOTE PARAGRAPHS 30. 1 TO 30.5 OF THE SAID CIRCULAR AS HEREUNDER : 30.1 UNDER THE EXISTING PROVISIONS OF SECTION 32 OF THE INCOME-TAX ACT, CARRY FORWARD AND SET OFF OF UNABSORBE D 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, SPECIALLY IN AN ERA WHERE OBSOLESCENCE TAKES PLACE SO OFTEN, THE ACT HAS DISPENSED WIT H THE RESTRICTION OF 8 YEARS FOR CARRY FORWARD AND SET OFF O F UNABSORBED DEPRECIATION. THE ACT HAS ALSO CLARIFIED THAT IN COMPUTI NG THE PROFITS AND GAINS OF BUSINESS OR PROFESSION FOR ANY PREVIOUS YEAR , DEDUCTION OF DEPRECIATION UNDER SECTION 32 SHALL BE MANDATORY. 30.3 UNDER THE EXISTING PROVISIONS, NO DEDUCTION FOR DEPRECIATION IS ALLOWED ON ANY MOTOR CAR MANUFACTURED OUTSIDE INDIA UNLESS IT IS USED (I) IN THE BUSINESS OF RUNNING IT ON HIRE FOR TOURISTS, OR ITA NO.1934/CHNY/2018 :- 4 -: (II) OUTSIDE INDIA IN THE ASSESSEES BUSINESS OR PROFESSIO N IN ANOTHER COUNTRY. 30.4 THE ACT HAS ALLOWED DEPRECIATION ALLOWANCE ON AL L IMPORTED MOTOR CARS ACQUIRED ON OR AFTER 1ST APRIL, 2 001. 30.5 THESE AMENDMENTS WILL TAKE EFFECT FROM THE 1ST AP RIL, 2002, AND WILL, ACCORDINGLY APPLY IN RELATION TO THE A SSESSMENT YEAR 2002-2003 AND SUBSEQUENT YEARS. 8. FROM PARAGRAPH 30.2 OF THE ABOVE CIRCULAR, IT IS CL EAR THAT THE RESTRICTION OF 8 YEARS FOR CARRY FORWARD AND SET OFF OF UNABSORBE D DEPRECIATION WAS DISPENSED WITH, WITH A VIEW TO ENABLE THE INDUSTRIES TO CONSERVE SUFFICIENT FUNDS TO REPLACE PLANT AND MACHINERY. 9. THE LEARNED SENIOR STANDING COUNSEL APPEARING FO R THE REVENUE WOULD POINT OUT THAT THOSE AMENDMENTS TOOK PLACE WITH EFFECT F ROM 01.4.2002 AND WOULD ACCORDINGLY APPLY IN RELATION TO THE ASSESSMENT YEAR 20 02-03 AND THE SUBSEQUENT YEARS WHEREAS IN THE ASSESSEE'S CASE, THE DEPRECIATION LOSS, W HICH THEY SOUGHT TO CARRY FORWARD IS FOR THE ASSESSMENT YEAR 1997-98. 10. THE PROPER MANNER, IN WHICH, THE MODIFICATION HA S TO BE UNDERSTOOD, IS TO THE EFFECT THAT FROM THE ASSESSMENT YEAR 2002- 03 , IF THE EIGHT YEARS' PERIOD WAS NOT LAPSED, THEN THE ASSESSEE WOULD BE ENTITLED TO CAR RY FORWARD THE LOSS WITHOUT ANY RESTRICTION ON THE TIME LIMIT. THIS ASPECT HAS BEEN D EALT WITH ELABORATELY IN THE DECISION OF THE DIVISION BENCH OF THE GUJARAT HIGH CO URT IN THE CASE OF GENERAL MOTORS INDIA (P) LTD. VS. DCIT [REPORTED IN (2013) 354 ITR 0244] WHEREIN THE RELEVANT PORTIONS ARE AS FOLLOWS : 37. THE CBDT CIRCULAR CLARIFIES THE INTENT OF THE AM ENDMENT THAT IT IS FOR ENABLING THE INDUSTRY TO CONSERVE SUFFICIE NT FUNDS TO REPLACE PLANT AND MACHINERY AND ACCORDINGLY THE AMENDMEN T DISPENSES WITH THE RESTRICTION OF 8 YEARS FOR CARRY FORWAR D AND SET OFF OF UNABSORBED DEPRECIATION. THE AMENDMENT IS APPLICA BLE FROM ASSESSMENT YEAR 2002-03 AND SUBSEQUENT YEARS. THIS MEANS TH AT ANY UNABSORBED DEPRECIATION AVAILABLE TO AN ASSESSEE ON 1ST DAY OF APRIL, 2002 (A.Y. 2002-03) WILL BE DEALT WITH IN AC CORDANCE WITH THE PROVISIONS OF SECTION 32 (2) AS AMENDED BY FINANCE ACT, 2 001 AND NOT BY THE PROVISIONS OF SECTION 32(2) AS IT STOOD BEFO RE THE SAID AMENDMENT. HAD THE INTENTION OF THE LEGISLATURE BEE N TO ALLOW THE UNABSORBED DEPRECIATION ALLOWANCE WORKED OUT IN A.Y. 1 997-98 ONLY FOR EIGHT SUBSEQUENT ASSESSMENT YEARS EVEN AFTER THE AMENDM ENT OF SECTION 32(2) BY FINANCE ACT, 2001 IT WOULD HAVE INCORPO RATED A PROVISION TO THAT EFFECT. HOWEVER, IT DOES NOT CONTAIN ANY SUCH PROVISION. HENCE KEEPING IN VIEW THE PURPOSE OF AMENDME NT OF SECTION 32(2) OF THE ACT, A PURPOSIVE AND HARMONIOUS INT ERPRETATION HAS TO BE TAKEN. WHILE CONSTRUING TAXING STATUTES, RULE OF STRICT INTERPRETATION HAS TO BE APPLIED, GIVING FAIR AND RE ASONABLE CONSTRUCTION TO THE LANGUAGE OF THE SECTION WITHOUT LEA NING TO THE SIDE OF ASSESSEE OR THE REVENUE. BUT IF THE LEGISLAT URE FAILS TO EXPRESS CLEARLY AND THE ASSESSEE BECOMES ENTITLED FOR A BENEFIT W ITHIN THE AMBIT OF THE SECTION BY THE CLEAR WORDS USED IN THE SECTI ON, THE BENEFIT ACCRUING TO THE ASSESSEE CANNOT BE DENIED. HOWEVE R, CIRCULAR NO.14 OF 2001 HAD CLARIFIED THAT UNDER SECTI ON 32(2), IN COMPUTING THE PROFITS AND GAINS OF BUSINESS OR PROFESS ION FOR ANY PREVIOUS YEAR, DEDUCTION OF DEPRECIATION UNDER SECTIO N 32 SHALL BE MANDATORY. THEREFORE, THE PROVISIONS OF SECTION 32(2) A S AMENDED BY FINANCE ACT, 2001 WOULD ALLOW THE UNABSORBED DEPR ECIATION ALLOWANCE AVAILABLE IN THE A.Y. 1997-98, 1999-2000, 2 000-01 AND 2001-02 TO BE CARRIED FORWARD TO THE SUCCEEDING YEARS, AND IF ANY UNABSORBED DEPRECIATION OR PART THEREOF COULD NOT BE S ET OFF TILL THE ITA NO.1934/CHNY/2018 :- 5 -: A.Y. 2002-03 THEN IT WOULD BE CARRIED FORWARD TILL THE TIME IT IS SET OFF AGAINST THE PROFITS AND GAINS OF SUBSEQUENT YEARS. 38. THEREFORE, IT CAN BE SAID THAT, CURRENT DEPRECIA TION IS DEDUCTIBLE IN THE FIRST PLACE FROM THE INCOME OF THE BUSINESS TO WHICH IT RELATES. IF SUCH DEPRECIATION AMOUNT IS LARGER THA N THE AMOUNT OF THE PROFITS OF THAT BUSINESS, THEN SUCH EXCESS COMES FOR A BSORPTION FROM THE PROFITS AND GAINS FROM ANY OTHER BUSINESS O R BUSINESS, IF ANY, CARRIED ON BY THE ASSESSEE. IF A BALANCE IS LEFT EVEN THEREAFTER, THAT BECOMES DEDUCTIBLE FROM OUT OF INCOME FROM ANY SOUR CE UNDER ANY OF THE OTHER HEADS OF INCOME DURING THAT YEAR. IN CASE THERE IS A STILL BALANCE LEFT OVER, IT IS TO BE TREATED AS UNABSO RBED DEPRECIATION AND IT IS TAKEN TO THE NEXT SUCCEEDING YEAR. WHERE TH ERE IS CURRENT DEPRECIATION FOR SUCH SUCCEEDING YEAR THE UNABSORBED DEPRECIATION IS ADDED TO THE CURRENT DEPRECIATION FOR SUCH SUCCEED ING YEAR AND IS DEEMED AS PART THEREOF. IF, HOWEVER, THERE IS NO CURRE NT DEPRECIATION FOR SUCH SUCCEEDING YEAR, THE UNABSORBED DEPRECIATION BECOMES THE DEPRECIATION ALLOWANCE FOR SUCH SUCCEEDING YEAR. WE ARE OF THE CONSIDERED OPINION THAT ANY UNABSORBED DEPRECIATION A VAILABLE TO AN ASSESSEE ON 1ST DAY OF APRIL 2002 (A.Y. 2002-03) WILL BE DEALT WITH IN ACCORDANCE WITH THE PROVISIONS OF SECTION 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 DISPENSED WITH, THE UNABSORBED DEPRECIATION FROM A.Y.1997-98 UPTO THE A.Y.2001-02 GOT CARRIED FO RWARD TO THE ASSESSMENT YEAR 2002- 03 AND BECAME PART THEREOF, IT CAME TO BE GOVERNED BY THE PROVISIONS OF SECTION 32(2) AS AMENDED BY FINANCE ACT, 2001 AND WERE AVAILABLE FOR CARRY FORWARD AND SET OFF AGAINST THE PROFITS AND GAINS OF SUBSEQUENT YEARS, WITHOUT ANY LIMI T WHATSOEVER. 11. A SIMILAR ISSUE WAS CONSIDERED BY A DIVISION BENCH OF THE BOMBAY HIGH COURT IN THE CASE OF CIT-3 VS. M/S.BAJAJ HINDUSTAN LTD. [REPORTED IN 201 8- TIOL-2730-HC-MUM-IT] FOLLOWING THE DECISION IN THE CASE OF CIT VS. HINDUSTAN UNILEVER LTD. [REPORTED IN (2017) 394 ITR 73]. THE SPECIAL LEAVE PETITION FILED BY THE REVENUE AGAINST THE ABOVE DECISION WAS DISMISSED BY THE HON'BLE SUPREME COURT IN THE DECISION REPORTED IN 2019 -TIOL36-SC-IT [PCIT-3 VS. M/S.BAJAJ HINDUSTAN LTD]. 12. IN THE DECISION OF THE PUNJAB & HARYANA HIGH COU RT IN THE CASE OF CIT VS. GTM SYNTHETICS LTD. [REPORTED IN (2012) 347 ITR 0458], AN IDENTICAL ISSUE WAS CONSIDERED IN THE FOLLOWING TERMS : 8. THE EFFECT OF OMISSION OF THE AFORESAID PROVISO WAS ENUMERATED BY THE CENTRAL BOARD OF DIRECT TAXES, VID E CIRCULAR NO. 794 DATED 9.8.2000 [(2000) 245 ITR (STATUTE)] 21 TH AT THE UNABSORBED DEPRECIATION ALLOWANCE COULD BE SET OFF AGA INST THE INCOME UNDER ANY OTHER HEAD EVEN WHERE THE BUSINESS WAS NOT CARRIED ON. CLAUSE 22 OF THE SAID CIRCULAR WHICH IS RELEVANT IS AS UNDER: '22. REQUIREMENT OF CONTINUANCE OF SAME BUSINESS FOR SET- OFF OF UNABSORBED DEPRECIATION DISPENSED WITH: 22.1 UNDER THE EXISTING PROVISIONS OF SUB-SECTION (2) O F SECTION 32 OF THE INCOMETAX ACT, CARRIED FORWARD UNABSO RBED DEPRECIATION IS ALLOWED TO BE SET OFF AGAINST PROFITS AND GAINS OF BUSINESS OR PROFESSION OF THE SUBSEQUENT YEAR, SUBJECT TO THE CONDITION THAT THE BUSINESS OR PROFESSION FOR WHICH DE PRECIATION ALLOWANCE WAS ORIGINALLY COMPUTED CONTINUED TO BE CARRIE D ON IN THAT YEAR. A SIMILAR CONDITION IN SECTION 72 FOR THE PURPOSE OF CARRY FORWARD AND SET OFF OF UNABSORBED BUSINESS LOSS WAS REMOVE D LAST YEAR. 22.2 WITH A VIEW TO HARMONISE THE PROVISIONS RELATING CARRY FORWARD AND SET OFF OF UNABSORBED DEPRECIATION AND U NABSORBED LOSS, THE ACT HAS DISPENSED WITH THE CONDITION OF CONTINUANC E OF SAME ITA NO.1934/CHNY/2018 :- 6 -: BUSINESS FOR THE PURPOSE OF CARRY FORWARD AND SET OFF OF U NABSORBED DEPRECIATION. 22.3 THIS AMENDMENT WILL TAKE EFFECT FROM 1ST APRIL, 2001, AND WILL, ACCORDINGLY, APPLY IN RELATION TO THE ASSESSME NT YEAR 2001- 2002 AND SUBSEQUENT YEARS.' 9. THE CIT(A) AND THE TRIBUNAL, THUS, RIGHTLY ALLOWED UNABSORBED DEPRECIATION RELEVANT TO THE ASSESSMENT YEAR 19 96-97 TO BE SET OFF AGAINST THE INCOME FROM LONG TERM CAPITAL GAINS AND INCOME FROM OTHER SOURCES FOR THE ASSESSMENT YEAR 2001-2002 . 13. RECENTLY, IN THE DECISION OF A DIVISION BENCH OF THE B OMBAY HIGH COURT IN THE CASE OF PCIT VS. GUNNEBO INDIA PVT. LTD. [REPORTED IN (2019 ) 104 CCH 0227], THE ISSUE WAS CONSIDERED IN FAVOUR OF THE ASSESSEE AF TER REFERRING TO THE DECISION OF THE DIVISION BENCH OF THE GUJARAT HIGH CO URT IN THE CASE OF GENERAL MOTORS INDIA (P) LTD., WHEREIN THE RELEVANT PORTIONS READ THUS : 3. THE REVENUE CARRIED THE MATTER IN APPEAL. THE APPELLATE TRIBUNAL DISMISSED THE APPEAL OF THE REVENUE MAKING THE FOLLOWING OBSERVATIONS- '16. WE HAVE OBSERVED THAT THE CURRENT YEAR'S DEPRECIATION IS ALLOWED TO BE SET OFF AGAINST TH E INCOME FROM BUSINESS AS WELL AS AGAINST THE OTHER HEADS OF INCOME A ND UNABSORBED DEPRECIATION IN CARRY FORWARD AND BECOME PART OF THE DEPRECIATION OF THE SUBSEQUENT YEAR AND THE TOTAL DEPR ECIATION BECOMES CURRENT YEAR'S DEPRECIATION AS PER SECTION 32(1) OF THE ACT, WHICH IS ALLOWED TO BE SET OFF AGAINST THE INCOME UNDER ANY HEAD OF INCOME. AS PER THE PROVISIONS OF SECTION 32(2) OF THE ACT R.W.S. 70, 71 AND 72 OF THE ACT, IT BECOMES VERY CLEAR THAT THE TOTAL DEPRECIATION COMPRISING OF THE DEPRECIATION OF THE RELE VANT ASSESSMENT YEAR ALONG WITH THE UNABSORBED DEPRECIATION O F THE EARLIER YEARS BECOMES THE TOTAL CURRENT YEAR'S DEPRECIA TION WHICH IS ALLOWED TO BE SET OFF AGAINST INCOME UNDER ANY HEAD O F INCOME INCLUDING LONG TERM CAPITAL GAIN. ACCORDINGLY, WE FIN D NO REASON TO INTERFERE WITH THE ORDER OF CIT(A) QUA THIS ISSUE A ND THE SAME IS HEREBY UPHELD. WE ALSO HOLD THAT AS PER PROVISIONS OF SECTION 72 OF THE ACT, THE UNABSORBED BUSINESS LOSS (OTHER THAN SPECULATI VE LOSS) OF EARLIER YEARS SHALL BE ALLOWED TO BE SET OFF ONLY AGAINST THE PROFITS AND GAINS FROM BUSINESS CARRIED ON BY THE ASSESSEE OF THE CUR RENT YEAR AND SO ON. WE ORDER ACCORDINGLY. HOWEVER, OUR ABOV E DECISION WITH RESPECT TO GROUND NO. (I) AND (II) RAISED IN MEM O OF APPEAL FILED BY REVENUE SHOULD BE READ IN CONJUNCTION WITH AND SUBJ ECT TO OUR FINDINGS WITH RESPECT TO GROUND NO. (III) AND (IV) WHI CH ARE DECIDED BY US IN THE PRECEDING PARA'S OF THIS ORDER AND THE COMP UTATION SHALL BE MADE ACCORDINGLY.' 4. HAVING HEARD THE LEARNED COUNSEL FOR PARTIES AND HAVING PERUSED THE DOCUMENTS ON RECORD, WE DO NOT FIND ANY ER ROR IN THE ORDER OF THE APPELLATE TRIBUNAL. GUJARAT HIGH COURT IN THE CASE OF GENERAL MOTORS INDIA (P) LTD. (SUPRA) HAD CONSIDERED SO MEWHAT SIMILAR ISSUE, OF COURSE IN THE BACKDROP OF THE ASSESSEE' S CHALLENGE TO A NOTICE OF REOPENING OF THE ASSESSMENT. THE GUJARAT HIGH COURT HAD HELD AND OBSERVED AS UNDER - '38 THEREFORE, IT CAN BE SAID THAT, CURRENT DEPRECIATION IS DEDUCTIBLE IN THE FIRST PLACE F ROM THE INCOME OF THE BUSINESS TO WHICH IT RELATES. IF SUCH DEPRECIATI ON AMOUNT IS LARGER THAN THE AMOUNT OF THE PROFITS OF THAT BUSIN ESS, THEN SUCH EXCESS COMES FOR ABSORPTION FROM THE PROFITS AND GAINS FRO M ANY OTHER BUSINESS OR BUSINESS, IF ANY, CARRIED ON BY THE A SSESSEE. IF A BALANCE IS LEFT EVEN THEREAFTER, THAT BECOMES DEDUCTIB LE FROM OUT OF INCOME FROM ANY SOURCE UNDER ANY OF THE OTHER HEADS OF INCOME DURING THAT YEAR. IN CASE THERE IS A STILL BALANCE LEF T OVER, IT IS TO BE TREATED AS UNABSORBED DEPRECIATION AND IT IS TAKEN TO T HE NEXT SUCCEEDING YEAR. WHERE THERE IS CURRENT DEPRECIATION FOR SUCH SUCCEEDING YEAR THE UNABSORBED DEPRECIATION IS ADDED TO TH E CURRENT DEPRECIATION FOR SUCH SUCCEEDING YEAR AND IS DE EMED AS ITA NO.1934/CHNY/2018 :- 7 -: PART THEREOF. IF, HOWEVER, THERE IS NO CURRENT DEPREC IATION FOR SUCH SUCCEEDING YEAR, THE UNABSORBED DEPRECIATION BECOMES TH E DEPRECIATION ALLOWANCE FOR SUCH SUCCEEDING YEAR. WE ARE OF THE CONSIDERED OPINION THAT ANY UNABSORBED DEPRECIATION AVA ILABLE TO AN ASSESSEE ON 1ST APRIL, 2002 (ASST. YR. 2002- 03) WIL L BE DEALT WITH IN ACCORDANCE WITH THE PROVISIONS OF S. 32(2) AS AMENDE D BY FINANCE ACT, 2001. AND ONCE THE CIRCULAR NO. 14 OF 20 01 CLARIFIED THAT THE RESTRICTION OF 8 YEARS FOR CARRY FORWARD AND SE T OFF OF UNABSORBED DEPRECIATION HAD BEEN DISPENSED WITH, THE UNABSORBED DEPRECIATION FROM ASST. YR. 1997-98 UP TO THE ASST. YR. 2001- 02 GOT CARRIED FORWARD TO THE ASST. YR. 2002-03 AND BECAME P ART THEREOF, IT CAME TO BE GOVERNED BY THE PROVISIONS OF S. 32(2) AS A MENDED BY FINANCE ACT, 2001 AND WERE AVAILABLE FOR CARRY FORWARD AND SET OFF AGAINST THE PROFITS AND GAINS OF SUBSEQUENT YEARS, W ITHOUT ANY LIMIT WHATSOEVER.' 14. IN OUR CONSIDERED VIEW, THE ABOVE DECISIONS WILL CLE ARLY ENURE TO THE BENEFIT OF THE RESPONDENT ASSESSEE. THUS, THIS ISSUE IS FULLY COVERED. THEREFORE, APP LYING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT, SUPRA, THE RE VENUES APPEAL IS DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED ON THE DAY OF 29 TH APRIL, 2021 IN CHENNAI. SD/ - SD/ - ( . ) (DUVVURU RL REDDY) /JUDICIAL MEMBER ( . ) (S. JAYARAMAN) /ACCOUNTANT MEMBER /CHENNAI, /DATED: 29 TH APRIL, 2021 . EDN, SR. P.S /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( )/CIT(A) 4. /CIT 5. /DR 6. /GF