Urgent
CA Vaibhavi Jhaveri
(Querist) 06 April 2012
This query is : Resolved
Our Assessee company has carried forward dep of AY 1997-98
which it has still remained unabsorbed and c/f. in AY 2007-08
The provision i.r.o. unabosrbed depreciation is
up to AY 1996-97 - Infinite
from AY 1997-98 to AY 2001-02- 8yrs
from AY 2002-03 - infinite
can the assessee company c/f dep of 1997-98 in AY 2007-08.
The issue is for unabsorb. dep. of AY 1997-98, time limit for c/f. will be infinite or 8 years.....
C. P. CHUGH
(Expert) 07 April 2012
Dear Vaibhavi, Please go though section 32(2) of the Act relating to Depreciation as appended below :
20[(2) Where, in the assessment of the assessee, full effect cannot be given to any allowance under sub-section (1) in any previous year, owing to there being no profits or gains chargeable for that previous year 21 , or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of sub-section (2) of section 72 and sub-section (3) of section 73, the allowance or the part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following previous year and deemed to be part of that allowance, or if there is no such allowance for that previous year, be deemed to be the allowance for that previous year, and so on for the succeeding previous years.]
If you read the section carefully, you would find that depreciation for any year which could not be allowed due to insufficiency of profit shall form part of depreciation of succeeding year, as if, it is depreciation for that succeeding year and shall be first allowed as deduction out of profits of that succeeding year.
In such manner there is no brought forward depreciation from earlier years and whatever remained unadjusted becomes the depreciation of the succeeding year, eligible to be allowed till fully exhaused.
Hope this solves your querry ang you got what i mean to say.
prabhakar singh
(Expert) 07 April 2012
Very lucid explanation given by Mr.C.P.CHUGH.Certainly query stands solved by him.
C. P. CHUGH
(Expert) 07 April 2012
Thanks Mr Singh for kind words.
CA Vaibhavi Jhaveri
(Querist) 09 April 2012
Thank u so much sir..for solving my query..yes i got the point..
prabhakar singh
(Expert) 10 April 2012
Dear CA Vaibhavi Jhaveri!
It is good to listen from you.
