COMMISSIONER OF INCOME-TAX Vs. RICO INDUSTRIES

JUDGEMENT

(1.) AT the instance of the Revenue, the following question of law has been referred to this court by the Income-tax Appellate Tribunal Chandigarh Bench, Chandigarh (hereinafter referred to as "the Tribunal"), for its opinion :

(2.) SHORTLY stated, the facts are : The assessee is a registered firm. For the assessment year 1980-81, depreciation admissible to the assessee was worked out to Rs. 3,30,671. The net income of the assessee before allowing the depreciation was worked out by the Income-tax Officer at Rs. 1,60,040. Depreciation to this extent was set off against this income. The balance depreciation of Rs. 1,70,631 could not be absorbed for want of profits. Loss of Rs. 1,70,631 on account, of unabsorbed depreciation was allowed against the income of the two partners for that year. The claim of the assessee was that this loss should not have been apportioned amongst the partners and the same should have been carried forward in the hands of the firm for adjustment and set off against the profits of the firm in the subsequent years. The claim of the assessee was declined by the Income-tax Officer.

(3.) THE Revenue, aggrieved against the aforesaid finding of the Commissioner of Income-tax (Appeals), filed an appeal before the Tribunal. The Tribunal upheld the view taken by the Commissioner of Income-tax (Appeals ). Noticing the difference of opinion between the various High Courts, the Tribunal decided to take the view which was in favour of the assessee.