“unabsorbed depreciation”

DepreciationSection 32(2)Section 32(2)810 judgments

The decision most relied on for unabsorbed depreciation is Velayudhaswamy Spinning Mills (P) Ltd. v. ACIT (340 ITR 477), cited in 213 judgments on BharatTax.

Leading authorities on unabsorbed depreciation

Velayudhaswamy Spinning Mills (P) Ltd. v. ACIT

340 ITR 477 · 2012 · High Court

213

citing judgments

If unabsorbed depreciation or losses from years prior to the initial assessment year for Section 80-IA claim have already been set off against other income, they cannot be notionally carried forward again to reduce the profits of the eligible unit for computing deduction under Section 80-IA. The notional carry forward provision under Section 80-IA(5) applies only to unabsorbed depreciation or losses that have not yet been absorbed.

General Motors India (P) Ltd. v. DCIT

354 ITR 244 · 2013 · High Court

141

citing judgments

Unabsorbed depreciation from Assessment Year 1997-98 to 2001-02, carried forward to AY 2002-03, is governed by Section 32(2) as amended by the Finance Act, 2001, allowing its unlimited carry forward and set off against income of subsequent years. Reassessment proceedings under Section 148 challenging such set-off require valid reasons and new tangible material.

CIT v. Rittal India (P) Limited

380 ITR 423 · 2016 · High Court

121

citing judgments

Additional depreciation is allowable under section 32(1)(iia) for new machinery or plant even when put to use for less than 180 days, with the unabsorbed balance available for claim in the subsequent year.

CIT v. Himatasingike Seide Ltd.

286 ITR 255 · 2006 · High Court

citing judgments

Deduction under Section 10A of the Income-tax Act is to be allowed only after setting off unabsorbed depreciation and brought forward business losses against the profits of the business.

CIT v. Black & Veatch Consulting Pvt. Ltd.

348 ITR 72 · 2012 · High Court

citing judgments

Depreciation, including unabsorbed depreciation, should not be reduced from the profits of an undertaking eligible for deduction under Section 10A of the Income-tax Act, 1961, when computing the deduction amount.

Dy. CIT v. Binani Industries Ltd.

178 TTJ 658 · 2016 · ITAT

citing judgments

The lower of unabsorbed depreciation or business loss is deductible from book profits under Clause (iii) of Explanation 1 to Section 115JB. Capital receipts, such as forfeiture of share warrants, which do not have the character of income, are not liable for book profits tax under Section 115JB.

S.M.I.L.E. Microfinance Limited v. ACIT (VACIT

2024 SCC OnLine MAD 8416 · 2024 · Reported

citing judgments

The higher tax rate under Section 115BBE, increased to 60% effective from April 1, 2017, is not applicable to transactions that occurred prior to this date.

62. Further, in CIT v. Silical Metallurgic Ltd.

324 ITR 29 · 2010 · High Court

citing judgments

In a scenario involving amalgamation, the accumulated losses and unabsorbed depreciation of an undertaking can be carried forward by the amalgamating company if it continues the business of the undertaking.

Judgments citing unabsorbed depreciation

Asst.C.I.T., Bangalore vs. M/S Tejas Networks Limited, Bangalore

In the result, the appeals filed by the revenue in IT(TP)A No

ITA 296/BANG/2015[2010-11]Status: DisposedITAT Bangalore09 Feb 2022AY 2010-11

Bench: Shri Chandra Poojari & Shri George George K.It(Tp)A Nos.296/Bang/2015 Assessment Year: 2010-11 M/S. Tejas Networks Ltd. Plot No.25, 5Th Floor Jp Software Park Acit, Circle-1, Ltu Vs. Electronic City, Phase I Bangalore Bangalore 560 100

For Appellant: Shri Jairam Raipura, D.RFor Respondent: Shri Annamalli & Shri Narendra Sharma, A.Rs

Section 154

No.582/Bang/2021 Page 25 of 34 16. The other issues urged by the assessee related to non setting off of brought forward losses and unabsorbed depreciation and also non-granting of refund. Both the issues require verification at the end of the A.O. Accordingly, we restore this issue to his file

DCIT, Bangalore vs. M/S Tejas Networks Limited, Bangalore

In the result, the appeals filed by the revenue in IT(TP)A No

ITA 1119/BANG/2015[2010-11]Status: DisposedITAT Bangalore09 Feb 2022AY 2010-11

For Appellant: Shri Jairam Raipura, D.RFor Respondent: Shri Annamalli & Shri Narendra Sharma, A.Rs

Section 154

Indo Nissin Foods Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Circle-3(1)(1), Bangalore

In the result, the appeal by the assessee is dismissed

ITA 809/BANG/2017[2010-11]Status: DisposedITAT Bangalore08 Feb 2022AY 2010-11

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2010-11

For Appellant: Shri Krishnan Hariharan, CAFor Respondent: Shri Priyadarshi Mishra, Addl.CIT(DR)(ITAT), Bengaluru

Section 115JSection 154Section 263

loss as on 31st March 2005 was Rs. 63,82,74,797. 3. MAT provisions were first applied in FY 2005-06. Since the unabsorbed depreciation was lesser than the business loss, it was set-off year-on-year. (working kept as page no. 73 of the paperbook ... spite of the transfer to the rehabilitation account in FY 2007-08 and the accumulated losses being Nil, the assessee had deducted the unabsorbed depreciation loss of Rs. 27,36,90,817 year-on-year from AY 2008-09 to AY 2012- 13 (page 83 of the paperbook). The loss

ITO -3(3)(4), Mumbai vs. M/S V.K. Lalaco Pvt. Ltd., Mumbai

In the result, appeal filed by the Revenue is dismissed

ITA 3599/MUM/2019[2014-15]Status: DisposedITAT Mumbai04 Feb 2022AY 2014-15

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Pavan Kumar Gadale, Hon'Ble & Income Tax Officer -3(3)(4) V. M/S. V.K. Lalco Pvt. Ltd., Room No. 672, 6Th Floor 1017/18, Dalamal Tower Aayakar Bhavan, M.K. Road 10Th Floor, 211, Nariman Point Mumbai - 400020 Mumbai – 400020 Pan: Aaacv9820A (Appellant) (Respondent) Assessee By : Shri Satish Modi Department By : Shri S.N. Kabra

For Appellant: Shri Satish ModiFor Respondent: Shri S.N. Kabra

Section 143(2)Section 14ASection 56(2)(viib)

Brief facts of the case are that, assessee filed its return of income on 20.10.2014 declaring total income of ₹.NIL after setting off unabsorbed depreciation of ₹.8,49,236/-. The case was selected for scrutiny under CASS and notice u/s. 143(2) and 142(1) of Income

M/S. Sri Kumarswamy Minerals Exports Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle-6(1)(2), Bangalore

In the result, the appeal filed by the assessee stands allowed for statistical purposes

ITA 686/BANG/2021[2014-15]Status: DisposedITAT Bangalore02 Feb 2022AY 2014-15

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2014-15 M/S. Sri Kumaraswamy The Deputy Minerals Exports Pvt. Ltd., Commissioner Of No. 58, Cunningham Road Income Tax, Cross, Circle – 6[1][2], Bangalore – 560 052. Bangalore. Vs. Pan: Aaqcs4798A Appellant Respondent : Shri V. Chandrashekar, Assessee By Advocate : Shri Sankarganesh K, Jcit Revenue By (Dr) Date Of Hearing : 02-02-2022 Date Of Pronouncement : 02-02-2022 Order Per Beena Pillaipresent Appeal By The Assessee Has Been Filed By Assessee Against The Ex-Parte Order Dated 12.10.2021 Passed By The Ld.Cit(A)-11, Bangalore Relating To Assessment Year 2014-15 On Following Grounds Of Appeal: “1. The Order Of The Learned Commissioner Of Income-Tax [Appeals]-12, Bengaluru, Passed Under Section 250 Of The Act Dated 12/10/2021, In So Far As It Is Against The Appellant Is Opposed To Law, Weight Of Evidence, Probabilities, Facts & Circumstances Of The Appellant'S Case. 2. The Appellant Denies Itself Liable To Be Taxed On A Total Income Of Rs. 103,97,62,214/- As Determined By The Learned Assessing Officer & Confirmed By The Learned

For Respondent: Shri V. Chandrashekar

Section 143Section 154Section 234Section 250

learned assessing officer under section 154 of the Act is bad in law in as much as the issue of denying set off of unabsorbed depreciation loss of Rs.85,06,293/- of a previous year i.e. Assessment Year 201213, required a long drawn process of verification and consequently the learned

DCIT 1 (1)(2), Mumbai vs. M/S Hdfc Ergo General Insurance Company Ltd., Mumbai

In the result, appeal of the Revenue is dismissed and Cross

ITA 14/MUM/2020[2008-09]Status: DisposedITAT Mumbai31 Jan 2022AY 2008-09

Section 143(3)Section 147Section 148Section 194JSection 194J(1)Section 40

investments of Rs.27,85,238/- and disallowance on account of Amortization of debt securities of Rs.9,21,121/-. In the said assessment, loss including unabsorbed depreciation of Rs.16,01,07,118/- of the current year and loss including unabsorbed depreciation of Rs.9,22,14,754/- of the earlier years

Xavient Information Systems (I) Pvt. Ltd., Noida vs. DCIT, New Delhi

The appeal of the assessee stands dismissed

ITA 472/DEL/2017[2010-11]Status: FixedITAT Delhi25 Jan 2022AY 2010-11

Section 120Section 127Section 143(1)Section 143(3)Section 92A(2)(b)

income for the year under consideration was filed declaring a total income of Rs. 51,58,328/- after taking benefit of set off of unabsorbed depreciation amounting to Rs. 3,10,184/-. The case was selected for scrutiny. During the course of assessment proceedings, the Assessing officer noticed that

Dy CIT 6 (2)(1), Mumbai vs. M/S Credtalpha Alternative Investment Advisors Pvt Ltd., Mumbai

In the result, appeal of the learned assessing officer is dismissed

ITA 7056/MUM/2019[2013-14]Status: DisposedITAT Mumbai19 Jan 2022AY 2013-14

Bench: Ms Suchitra Kamble & Shri Prashant Maharishithe Dy. Commissioner Of Credtalpha Alternative Income Tax 6(2) (1) Investment Advisors Pvt Ltd Room No. 504, 8Th Floor, Ashford Centre, Aykar Bhavan Vs. Shankar Rao Narayan Marg Maharishi Karve Road , Lower Parel , Mumbai-400 020 Mumbai-400 013 Pan No. Aaecc6357K Appellant .. Respondent

For Appellant: Shri Rahul SardaFor Respondent: Shri Ashish Kumar DR

Section 56

case and in law, the learned CIT – A erred in deleting the addition made by the assessing officer on account of business expenses and unabsorbed depreciation even though the pre-commencement expenses to setting up of the plant for business purposes, such income is required to be capitalized ... made by the learned assessing officer. With respect to the disallowance of the business expenditure of Rs 2 39,70,421 and unabsorbed depreciation of ₹ 2,066,618/– the learned CIT – A allowed the claim of the assessee following the order of his predecessor for assessment year

Connaught Plaza Restaurants Pvt Ltd., New Delhi vs. DCIT Circle-73(1), New Delhi

The appeal of the assessee is partly allowed in terms of our aforesaid observations

ITA 993/DEL/2020[2012-13]Status: DisposedITAT Delhi31 Dec 2021AY 2012-13

Bench: Shri G.S. Pannu & Shri Ravish Sood

For Appellant: Shri Rohit Jain, Advocate a/wFor Respondent: Shri Sumit Kumar Varma, Sr.D.R

Section 133ASection 194CSection 194ISection 201Section 201(1)Section 201(3)

return of income for AY 2011-12, declaring an income of Rs.23,50,89,091/- (before setting off the brought forward business losses and unabsorbed depreciation). 3. Shorn of unnecessary details, in order to verify compliance of the provisions of Chapter XVII-B of the Act, survey proceedings u/s.133A

Connaught Plaza Restaurants Pvt. Ltd, New Delhi vs. DCIT, Circle-73(1), Delhi

The appeal of the assessee is partly allowed in terms of our aforesaid observations

ITA 1984/DEL/2020[2011-12]Status: DisposedITAT Delhi31 Dec 2021AY 2011-12

Bench: Shri G.S. Pannu & Shri Ravish Sood

For Appellant: Shri Rohit Jain, Advocate a/wFor Respondent: Shri Sumit Kumar Varma, Sr.D.R

Section 133ASection 194CSection 194ISection 201Section 201(1)Section 201(3)

Adm Agro Industries Latur and Vizag Pvt. Ltd., New Delhi vs. DCIT, Circle- 1(2), New Delhi

In the result, the appeal of the assessee is partly allowed

ITA 4446/DEL/2018[2007-08]Status: DisposedITAT Delhi31 Dec 2021AY 2007-08

Bench: Shri G.S.Pannu & Shri Kul Bharat[Assessment Year : 2007-08] Adm Agro Industries Latur & Vizag Vs Dcit, Pvt.Ltd., (Previously Known As Tinna Circle-1(2), Oil & Chemicals Pvt.Ltd.), New Delhi-110002. B-1, Khaitan House, Defence Colony, New Delhi-110024. Pan-Aaact0700F Appellant Respondent Appellant By Ms. Ananya Kapoor, Adv. & Sh. Tarun Chanana, Adv. Respondent By Mrs. Alka Gautam, Sr.Dr Date Of Hearing 13.10.2021 Date Of Pronouncement 31.12.2021

Section 143(3)Section 154Section 250Section 32(2)

circumstances of the case, the CIT(Appeals) has erred on facts and in law in upholding the action of AO disallowing set off of unabsorbed depreciation amounting to Rs. 3,83,54,673/- claimed for A.Y. 1995-96, 1996-97 and 1998-99 against the profits ... That, on the facts and circumstances of the case, the AO as well as CIT(Appeals) have failed to appreciate that the unabsorbed depreciation available as on 1 April 2001 would be governed by the provisions of section 32(2) of the Act as amended by the Finance

Rajputana Fertilizers Ltd., New Delhi vs. ACIT, Circle-21(2), New Delhi

ITA 7587/DEL/2018[2015-16]Status: DisposedITAT Delhi22 Dec 2021AY 2015-16

Bench: Shri R. K. Panda & Shri Kuldip Singh(Through Video Conferencing)

For Appellant: Shri Anil Jain, AdvocateFor Respondent: Shri Munesh Kumar [CIT]–D.R

Section 10(34)Section 142(1)Section 143(3)

identity. 5. The Ld. CIT(A) has erred in not commenting on the action of AO in not providing benefit of set off of unabsorbed depreciation. “ ITA. No. 7587/Del/2018 : “1. The Ld. CIT (A) has erred in confirming the order of the AO in assessing the income

M/S Rajputana Fertilizers Ltd., New Delhi vs. ACIT, New Delhi

ITA 2919/DEL/2017[2013-14]Status: DisposedITAT Delhi22 Dec 2021AY 2013-14

Bench: Shri R. K. Panda & Shri Kuldip Singh(Through Video Conferencing)

For Appellant: Shri Anil Jain, AdvocateFor Respondent: Shri Munesh Kumar [CIT]–D.R

Section 10(34)Section 142(1)Section 143(3)

Pearls News Network Pvt. Ltd., New Delhi vs. DCIT, Circle- 19(2), New Delhi

In the result, the appeal filed by the assessee is dismissed

ITA 3715/DEL/2018[2012-13]Status: DisposedITAT Delhi21 Dec 2021AY 2012-13

Bench: Shri R.K. Panda & Shri K. Narasimha Charyassessment Year: 2012-13 Pearls News Network Pvt. Ltd., Vs Dcit, 705, 7Th Floor, Manjusha Building, Circle-19(2), Nehru Place, New Delhi. New Delhi. Pan: Aaecp3680L (Appellant) (Respondent) Assessee By : None Revenue By : Shri Anil Gandhi, Sr. Dr Date Of Hearing : 07.12.2021 Date Of Pronouncement : 21.12.2021 Order Per R.K. Panda, Am: This Appeal Filed By The Assessee Is Directed Against The Order Dated 14Th July, 2017 Of The Cit(A)-31, New Delhi, Relating To Assessment Year 2012-13. 2. None Appeared On Behalf Of The Assessee At The Time Of Hearing. No Application Seeking Adjournment Of The Appeal Has Been Filed. A Perusal Of The Order Sheet Entries Shows That Although The Case Was Fixed For Hearing On Various Dates, No One Was Appearing. Further, The Notices Sent By Rpad Were Returned By The Postal Authorities With The Remark ‘Left.’ The Assessee Has Also Not Taken Any Step To Intimate The Change Of Address, If Any. Further, The Notice Was Directed To Be Served By The Revenue & The Departmental Notice Server Who Was Deputed To Serve The Dasti Summons Has Reported That The Premise Of The Assessee Was Closed & No One Was Residing There For Which The Notice Was Fixed At The Gate Of The Assessee Company. The Report Of The Notice Server Is Also Placed On Record. Under These Circumstances, We Deem It Proper To Decide The Appeal On The Basis Of The Material Available & After Hearing The Ld. Dr.

For Appellant: NoneFor Respondent: Shri Anil Gandhi, Sr. DR

Section 144Section 30Section 37(1)Section 68

circumstances of the case by not issuing clear directions to the Ld. AO for allowance of brought forwarded assessed business loss & unabsorbed depreciation in a time bound period. 6. Levy of interest u/s 234A and 234B for the additions sustained by Id CIT(A) is not justified and fair

DCIT, Circle- 12(1), New Delhi vs. Ifci Ltd., New Delhi

The appeal of the Department stands dismissed

ITA 2895/DEL/2018[2012-13]Status: DisposedITAT Delhi30 Sept 2021AY 2012-13

Section 115JSection 14A

declaring an income of Rs.1,67,58,68,134/- after set off against brought forward business loss of Rs.1,95,84,65,473/- and unabsorbed depreciation of Rs.1,70,83,02,735/-. The book profits U/s 115JB of the Income Tax Act, 1961 (hereinafter called ‘the Act’) were computed ... showing a total income of Rs.1,42,97,88,723/- after setting off brought forward business loss of Rs.1,95,81,90,350/- and unabsorbed depreciation of Rs.1,70,83,02,735/- and book-profits U/s 115JB at Rs.5,50,26,19,665/-. The assessment was completed at an income

Oberoi Motors, Ambala vs. ACIT, Central Circle, Karnal

In the result, the appeal of the assessee is allowed

ITA 3513/DEL/2018[2013-14]Status: DisposedITAT Delhi25 Aug 2021AY 2013-14

Bench: Shri Kul Bharat & Shri O.P.Kantassessment Year : 2013-14 Oberoi Motors, Vs Acit, C/O-Rajiv Goel & Central Circle, Karnal. Associates, 179, Bank Road, Ambala Cantt., Haryana Pan-Aaafq5401H Appellant Respondent Appellant By Sh.Rohit Goel, Ca Respondent By Ms. Pramita M.Biswas, Cit Dr Date Of Hearing 14.07.2021 Date Of Pronouncement 25.08.2021

Section 133ASection 68

grounds of appeal:- 1. "The learned CIT(Appeals) has erred in law and facts in not allowing the set off of Business Loss and unabsorbed depreciation of scooter business as held to be eligible for carried forward against Property Dealing income of Rs.25,00,000/- for the year. 2. That ... only effective ground raised by the assessee in this appeal is against the declining the claim of set off of Business Loss and unabsorbed depreciation of scooter business against property dealing income of Rs.25,00,000/-. 3. The facts giving rise to the present appeal are that a survey operation

M/S. Tcs E-Serve International Ltd., Mumbai vs. ACIT, Gurgaon

In the result, the appeal of the assessee is allowed

ITA 1372/DEL/2016[2010-11]Status: DisposedITAT Delhi06 Aug 2021AY 2010-11

Bench: Shri N.K. Billaiya & Shri K. Narasimha Charyassessment Year: 2010-11

For Appellant: Sh. S.P. Singh, CA &For Respondent: Ms. Anima, Sr. DR

Section 10A

year before allowing deduction u/d. 10AA which was not done by ld. Assessing Officer; and (iii) the claim of assessee for set off of unabsorbed depreciation against other income of Rs.35,25,367/- was not in accordance with the law. He, therefore, by adding the addition of Rs.43 ... said expenses have not been reduced from the income eligible for deduction u/s. 10AA in earlier years; that the brought forward business losses and unabsorbed depreciation of the eligible unit should not have been set off against the profits of the business of eligible unit before allowing deduction u/s. 10AA

Shivkala Developers Pvt. Ltd., Ghaziabad vs. ITO, New Delhi

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 2766/DEL/2017[2007-08]Status: DisposedITAT Delhi16 Jul 2021AY 2007-08

Bench: Shri O.P. Kant & Shri Kuldip Singh[Through Video Conferencing] Assessment Year: 2007-08

Section 144Section 68Section 69

that the assessee company filed its return of income for the year under consideration on 02/11/2007 declaring current year loss of ₹ 95,534/- and unabsorbed depreciation of ₹ 2800/- which was carried forward to subsequent years. The return of income filed by the assessee was selected for scrutiny assessment and statutory

DCIT, New Delhi vs. M/S Sil Investment Ltd., Rajasthan

In the result, appeal of the Revenue is dismissed

ITA 3539/DEL/2011[2003-04]Status: DisposedITAT Delhi16 Jul 2021AY 2003-04

Bench: Sh. Anil Chaturvedi & Sh. Kuldip Singh(Through Video Conferencing) Dcit Vs. M/S. Sil Investment Ltd., Circle – 23(2), (Formerly Known As Sutlej New Delhi – 02 Industries Ltd.) Panchpahar Road, Bhawani Mandi, Jhalawar, Pan No. Aabcs 2899 H Rajasthan - 326502 (Appellant) (Respondent) Assessee By Shri Rohit Jain, Adv. Revenue By Shri Prakash Dubey, Sr. D.R. Date Of Hearing: 13/07/2021 Date Of Pronouncement: 16/07/2021 Order Per Anil Chaturvedi, Am:

Section 115JSection 143(3)Section 147Section 148Section 80ISection 80M

question of law. In its submission and its paper book unit wise and year wise computation was given alognwith progressive and unabsorbed depreciation and losses. The record reveals that during the relevant period profit was derived from only two units and I agree with the submission of the appellant that

ACIT, Central Circle- 17, New Delhi vs. Spectrum Coal & Power Ltd., New Delhi

ITA 5405/DEL/2017[2002-03]Status: DisposedITAT Delhi09 Jul 2021AY 2002-03

Bench: Shri N.K. Billaiya & Shri Kuldip Singh(Through Video Conference)

For Appellant: Ms. Ananya Kapoor, AdvocateFor Respondent: Shri Prakash Dubey, Senior DR

Section 143Section 147Section 271(1)(c)Section 275

computed Rs.11,09,985/- under the normal provisions of the Act and claimed depreciation of Rs.6,35,84,390/- on the brought forward unabsorbed depreciation of Rs.10,56,06,113/- whereas the AO allowed depreciation as per the Act at Rs.7,14,24,272/- and carry forward losses arrived ... ./2017 Income from business 10,56,06,113 INCOME FROM OTHER SOURCES Interest on Bank deposits considered separately 11,09,985 Less: Brought forward unabsorbed depreciation (10,56,06,113) GROSS TOTAL INCOME 11,09,985 Whereas the Ld. AO has allowed the correct depreciation at Rs.7