PALANIAPPA TRANSPORTS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) WE are concerned with the asst. yr. 1973-74 corresponding to the previous year ended on 30th May, 1972. The assessee is a registered firm and claimed set off of unabsorbed depreciation of the earlier years. There were conflicting decisions of the various High Courts and the Tribunal chose to follow the decision of the Allahabad High Court in K.T. Wire Products vs. Union of India and that of the Gujarat High Court in CIT vs. Garden Silk WEaving Factory (1975) 101 ITR 658 (Guj) : TC 27R.802 and held that the assessee was not entitled to claim such set off in respect of unabsorbed depreciation of the earlier years. The decision of the Tribunal was rendered on 30th November, 1976. Subsequent to the said decision, the Madras High Court rendered a judgment in CIT vs. Nagapatinam Import & Export Corporation following certain decisions of the Bombay High Court. The view of the Madras High Court was that the assessee could claim such a set off. Armed with this decision of the Madras High Court, the assessee filed an application under s. 254(2) of the IT Act, 1961, seeking rectification.

(2.) SEC. 254(2) of the IT Act, 1961, is as follows :

(3.) THEREFORE, even on merits the assessee cannot succeed in seeking to set off unabsorbed depreciation of the earlier years. This is because it is admitted by the assessee that the entire amount of unabsorbed depreciation was fully allocated to all the three partners as seen from the order of the ITO dt. 28th February, 1976.