COMMISSIONER OF INCOME-TAX vs. BARODA CRYSTAL GLASS LTD

ITR/42/1994HC GujaratGJHC24020120199407 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 right in law in allowing unabsorbed depreciation brought forward from earlier years against the income of the current year, even if there was no business income. The Court's reasoning was based on the ratio of the 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 Commissioner of Income-tax (Revenue) has referred a question of law to the High Court of Gujarat at Ahmedabad at the instance of the Revenue. The reference pertains to assessment years 1982-83, 1983-84, and 1984-85. The Income-tax Appellate Tribunal (Tribunal) had held that unabsorbed depreciation brought forward from earlier years was allowable against the current year's income, even if the current year's income was solely from 'other sources' and there was no business income. The assessee is Baroda Crystal Glass Ltd. The Revenue is the Commissioner of Income-tax.

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 non-business income). Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The learned standing counsel for the revenue 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 42 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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