Law: Income Tax Ordinance, 1979

Section: 34,35,36,37,38,62,80C,59,69A,63,65

ORDER The Order was passed by Muhammad Munir Qureshi, Accountant Member - These appeals by a public limited company arise out of order of the CIT (A), Zone-III, Lahore dated 10-12-2002. 2. It is the appellant's contention that the first appellate authority has illegally rejected appellant company's claim with regard to brought-forward depreciation pertaining to assessment years 1991-92 to 1993-94. 3. The facts in this case are that the assessee company has been assessed u/s 62 for assessment years 1991-92 to 1993-94 and u/s 80-C (presumptive regime) for 1994-95. Thereafter, assessments have again been framed u/s 62. According to the AR, the company's depreciation claim for 1991-92 to 1993-94 was required to be carried forward as it could not be adjusted against income in these years. However, the department is of the view that as assessment for 1994-95 has been framed u/s 80-C, it represents final discharge of all liabilities till 1994-95 and hence the depreciation claim pertaining to 1991-92 to 1993-94 could not be carried forward to 1995-96 and beyond. The AR argues that the departmental contention is wholly misconceived and against express statutory stipulation. It is emphasized that the law does not impose any embargo on carry forward of depreciation claim/losses notwithstanding an assessment made u/s 80-C in an intervening period - in this case assessment year 1994-95. The AR has specifically drawn our attention to case law cited as ITR-1962-46-707 in which it has been held that unabsorbed depreciation claim can be carried forwarded "add-infinitum". Separate case law reported as (1995) 71 Tax 221 (Trib.) has also been cited by the AR in support of his contention regarding carry forward of loss/unadjusted depreciation. 4. The DR opposes the AR's contention and argues that as assessment for 1994-95 has been framed u/s 80-C, all prior claims with regard to unabsorbed depreciation are deemed to have been finally settled / discharged in that year. 5. We have heard both sides and have examined the available record and have also perused the case law cited before us. After due consideration of all pertinent aspects, we are of the considered view that the…

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