The Commissioner Of Income Tax v. M/S.surge Enterprises Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.928 OF 2008WITHINCOME TAX APPEAL NO.767 OF 2008WITHINCOME TAX APPEAL NO.774 OF 2008WITHINCOME TAX APPEAL NO.905 OF 2008 The Commissioner of Income Tax, Vs. M/s.Surge Enterprises Ltd. ..Appellant ..Respondent Mr.Suresh Kumar for the Appellant.Mr.F.V.Irani i/b.Mr.Amin Kherada for the Respondent. CORAM :- DR.S.RADHAKRISHNAN &S.J.KATHAWALLA, JJ.DATE : 23RD SEPTEMBER, 2008 P.C. .Heard the learned Counsel for the parties. In the above, the Appellant is seeking to raise thefollowing substantial questions of law: a. Whether in the facts and circumstances ofthe case and in law, the Tribunal is right indirecting the Assessing Officer to allow theset off of un-absorbed depreciation broughtforward for the earlier years against thepresent year, in which there was no businessincome at all? Whether such directions arecontrary to the provision of Section 32 of theIncome Tax Act, which clearly lays down thatsuch depreciation can be set off againstbusiness income and not against any otherincome?b. Whether in the facts and circumstances ofthe case and in law, the Tribunal is right inrelying upon the speech of the Hon’ble FinanceMinister, when the provision of the Act, doesnot allow such kind of set off? 2.The learned Counsel for the Respondents in his speech, while introducing the Finance (No.2) Bill,1996, has stated as under: "Clause 11 of the Bill seeks to amend section32 of the Income Tax Act,1961, relating todepreciation. During the course of discussionon the General Budget, a number of Hon’bleMembers have expressed their apprehension thatthe proposed amendment limiting carry forwardof unabsorbed depreciation to 8 years willadversely affect the growth of industry.Similar apprehensions have been raised in alarge number of post-budget memoranda. Iwould like to allay these fears. The proposedamendment is only prospective inasmuch as thecumulative unabsorbed depreciation broughtforward as on 1st April,1997, can still be setoff against taxable business profits or incomeunder any other head for the assessment year1997-98 and seven subsequent assessmentyears." 3. Mr.Suresh Kumar, the learned counsel for the relied upon for the purpose of interpreting theSection. In that view of the matter, there isabsolutely no substantial question of law involved in the above Appeals. Hence, all the above Appeals stand dismissed. (S.J.KATHAWALLA,J.) (S.J.KATHAWALLA,J.) (DR.S.RADHAKRISHNAN,J.)