COMMISSIONER OF INCOME TAX vs. BARODA CRYSTAL GLASS WORKS LTD

ITR/9/1994HC GujaratGJHC24020087199407 November 2001Author: HONOURABLE MR. JUSTICE MOHIT S. SHAH,HONOURABLE MR. JUSTICE D.A.MEHTA2 pages

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What did the High Court hold?

The High Court held that the Tribunal was correct in law in allowing unabsorbed depreciation brought forward from earlier years to be set off against the current year's income, even if the current year's income was only from 'other sources' and there was no business income. The Court's reasoning was based on the ratio of the cited decisions in CIT vs. Deepak Textiles Industries Ltd. and CIT vs. Virmani Industries Pvt. Ltd. The question referred was answered in the affirmative, in favour of the assessee and against the revenue. The reference was disposed of accordingly, with no order as to costs. No issue was expressly left undecided.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) referred a question to the High Court of Gujarat at Ahmedabad at the instance of the Commissioner of Income Tax. The assessment year in question is 1985-86. The dispute pertains to whether unabsorbed depreciation from earlier years can be set off against the current year's income, even if that income is solely from 'other sources' and there is no business income. The ITAT had ruled in favour of the assessee, holding that such set-off was permissible. The revenue challenged this decision.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the unabsorbed depreciation brought forward from earlier years was allowable against the current year's income which is only from other sources even if there is no business income? (Question of law, concerning the allowability of unabsorbed depreciation against income from other sources). Assessee's Contention: Not recorded in the judgment. Revenue's Contention: The revenue, represented by Mr. Akil Kureshi, submitted that the question is concluded by decisions of the High Court and the Apex Court in CIT vs. Deepak Textiles Industries Ltd., 210 ITR 1029 and CIT vs. Virmani Industries Pvt. Ltd., 216 ITR 607.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 9 of 1994

For Approval and Signature:

Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE D.A.MEHTA

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

Whether it is to be circulated to the Civil Judge? : NO

The order continues below.

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