M/S G.E Motors India (P) Ltd ( Now Known As ... vs The Dy. Commissioner Of Income Tax on 20 January, 2017
(c) We find that the impugned order of the Tribunal while allowing the assessee-respondents'
claim follows the decision of the Gujarat High Court in General Motors India Pvt. Ltd. v. Deputy
CIT reported in [2013] 354 ITR 244 (Guj) wherein on identical facts it was held that the unab
sorbed depreciation for the assessment year 1997-98 up to the assessment year 2001-02 could be
allowed to be set off, if it was still unabsorbed on April 1, 2001. The above decision also placed
upon the Central Board of Direct Taxes Circular No. 14 of 2001, dated November 22, 2001 (see
[2001] 252 ITR (St.) 62 ) to hold that any unabsorbed depreciation which is available on 1st day
of April, 2001 would be dealt with in accordance with the provisions of section 32(2) of the Act as
amended by the Finance Act of 2001. Moreover, the Circular No. 14 of 2001 issued by the
Central Board of Direct Taxes clarifies that restriction of eight years to carry forward and set off
the unabsorbed depreciation has been dispensed with. Consequently, unabsorbed depreciation for
the intervening periods between assessment years 1997-98 up to 2001-02, if available in the
assessment year 2002-03 would be allowable as part of carried forward depreciation from the
assess ment year 2002-03 onwards. No decision contrary to the decision of the Gujarat High
Court has been shown to us. It is clarified that although the decision of the Gujarat High Court
was rendered in the context of reopening notice it has also examined the issue on merits and drew
support from the Central Board of Direct Taxes circular which is beneficial to the assessee to
conclude as aforesaid. Nothing has been shown to us to indicate why the decision of the Gujarat
High Court in General Motors (India) Ltd. should not be followed in the present facts."