COMMISSIONER OF INCOME-TAX AND ORS Vs. DEPUTY COMMISSIONER OF INCOME-TAX AND ORS

JUDGEMENT

(1.) This ITA filed under section 260-A or I.T Act, 1961 arising out of order dated 25-11-2005 passed in ITA No.ll8/Ban/2003 for the Assessment Years 1996-97, praying to formulate the substantial questions of law stated therein and allow the appeal and set aside the order passed by the ITAT, Bangalore in ITA NO.118/BAN/2003 dated 25-11-2005 and confirm the order passed by the Appellate Commissioner confirming the order passed by the Deputy Commissioner of Income Tax, (Asst), Special Range-4, Bangalore. This appeal coming on for hearing this day, Kumar J.) delivered the following;- JUDGMENT This appeal is by the revenue challenging the order passed by the Tribunal, which allowed the claim of the assessee to carry forward depreciation,

(2.) The Assessee Company has set up a 100% export oriented unit. The assessee exercised its option to claim exemption under Section 10B of the Income Tax Act for the assessment year 1996-97. While computing the assessment, the Assessing Officer was of the view that the unabsorbed depreciation of the earlier years, would acquire the character of the current years depreciation and the same has to be set off against the current year's business income in arriving at the profits of the export oriented unit, income of which Is claimed to be exempted under Section 10B(1) of the Act, Therefore, the Assessing Officer denied the claim of the assessee to carry forward depreciation. The assessee preferred an appeal, which came to be dismissed. It is against the said order, the assessee preferred an appeal to the Tribunal. The Tribunal following the judgment rendered by ITAT, Bangalore Bench in the case of Himatsingika Seida Ltd., Vs. ACIT, 63 ITD 290) held that the Assessing Officer was not justified in denying the claim of the assessee to carry forward depreciation and thus allowed the appeal of the assessee arid granted the deduction. Aggrieved by the same, the revenue is in appeal,

(3.) The judgment of the ITAT, Bangalore Bench in, the case of Himatsingika Seida Ltd., Vs. ACIT was challenged by the revenue before this Court. This Court by its order dated 4th August 2006 passed in ITRC No.350/1998 held that the Tribunal was not right in law in holding that the assessment order passed by the Assessing Officer allowing the claim of the assessee for adjustment of the unabsorbed depreciation against the other business income once again to show nil tax liability and it held that the said order is erroneous and prejudicial to the interests of the Revenue and accordingly, it set aside the judgment of the Tribunal