Law:

Section:

Section 32 of the Income-tax Act, 1961 [Corresponding to section 10(2)(vi)(b) of Indian Income-tax Act, 1922] - Depreciation - Unabsorbed depreciation - Assessment year 1958-59 - Whether only qualification for unabsorbed depreciation it to be treated as an allowance for year was that it must have been properly allowed in earlier years and by reason of its not being absorbed, must have been allowed to be carried forward to current assessment year - Held, yes - Whether it could not be said that in order to get advantage of unabsorbed depreciation carried forward to assessment year plant or machinery in respect of which depreciation had been allowed, must still be in use in assessment year - Held, yes FACTS The assessee carrying on business of cloth processing was subsidiary of another company 'BIL' for which it was doing majority of activities. In 1956 entered into a contract with the assessee-company for processing their goods by the use of a special kind of machinery which the 'BIL' imported from foreign countries and supplied to the assessee-company. For installing the new machinery supplied, the assessee-company sold off its old machinery by stages and the assessee agreed to work only for 'BIL'. The company sought to set off accumulated unabsorbed depreciation against income of relevant year. ITO held that the unabsorbed depreciation relating to the earlier years could not be claimed to be set off against the profits of the assessment year. According to him, and consequently the unabsorbed depreciation relating to the earlier years could not be claimed to be set off against the profits of the assessment year. According to him, the processing in the assessment year was done on the machinery belonging to the 'BIL', which was a special kind of machinery for the manufacture of plastic sheets. This special kind of work which was done in the assessment year, was not done as a separate section as it constituted the whole of the work that was done by the assessee during the assessment year and, consequently, the assessee during the assessment year had not done its old business of printing and dyeing on its own machinery and raw material but had operated on the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492