Rakesh Tiwari, J. - (1.) HEARD learned Counsel for the parties and perused the record.
(2.) THIS appeal has been preferred by the appellant CIT -I, Lucknow under Section of the IT Act, 1961 (hereinafter referred to as the 'Act') challenging the validity and correctness of the judgment and order dt. 31st March, 2003 passed by the Tribunal, Lucknow Bench, Lucknow in ITA No. 769/Luck/2001 for the asst. yr. 1995 -96. The facts of the case are that the assessee is a closely held domestic company which filed its return of income on 30th Nov., 1995 after setting off the brought forward losses of earlier years against the current year's income computed at Rs. 10,14,442. The income from the various divisions of the company in the relevant year 1995 -94 was as under: Division Income Income from construction division Rs. 3,76,939 Loss of cement division Rs. (21,63,703) Income from Nainital Hotel Rs. 35,01,828 Income from Lucknow Hotel Rs. 33,25,612 The aggregate income set off of all the units came to Rs. 35,43,845. After allowing the unabsorbed brought forward losses (depreciation) of earlier years, the aforesaid income/loss was set off to the extent of aforesaid income/loss. As the gross total income as defined under Section , was a loss, the assessee's claim for deductions under Sections (Rs. 7,03,695), (Rs. 8,318) and under Section (Rs. 8,79,619) were not allowed by the AO.
(3.) THE assessee preferred an appeal before the CIT(A). The appellate Court vide its order dt. 1st June, 2001 allowed the deduction under Section to extent of unabsorbed depreciation relating to hotel divisions at Lucknow and Nainital brought forward from earlier years. However, the appellate Court allowed full claim of deduction under Section upholding the order of the AO disallowing the claim of deduction under Sections and .;