Treatment of unabsorbed depreciation of financial year 1996-97 to 2000-01

Citation: The DCIT Vs M/s Times Guaranty Limited, ITA Nos. 4917 & 4918/Mum/2008

Court: ITAT Mumbai (Special bench)

The unabsorbed depreciation relating to assessment year 1997- 98 to 1999- 2000 is to be dealt with in accordance with the provisions of section 32(2) as applicable for assessment year 1997- 98 to 1999- 2000.

Section 32 of the Income Tax Act (the ITA) dealing with depreciation has gone through several changes from financial year (F.Y.) 1995- 96 to F.Y. 2001- 02. These amendments are be summarized as under:

• Up to F.Y. 1995- 96, the unabsorbed depreciation could be carried forward indefinitely and could be set off against any income of the subsequent years,

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