Once the depreciation allowable under s 32(1) cannot be allowed or partly allowed, the unabsorbed portion of such depreciation automatically becomes the depreciation of the subsequent year, subject to the provisions of s 72(2) and 73(3), as held by AhdTrib in ACIT v Mehsana District Co-op Milk Producers Union Ltd — In favour of: The assessee; ITA Nos 825 and 837 (Ahd) of 2009, Co No 89 (Ahd) of 2009: (AY 1999–2000).
The carry forward of unabsorbed depreciation, as per s 32(2), is automatic and the assessee is not required to fulfil any condition so as to be entitled to obtain such carry forward.
Carry forward and set-off of business losses
— Once the order of the appellate authorities in a quantum appeal have become final and the effect has been given thereto and the loss has determined thereby, the same has to be carried forward to the subsequent years as per the provisions of the Income-tax Act, 1961.
Section 139(3) would have application only where the assessee files the return disclosing the loss either under the head “profit and gains of business or profession” or under “capital gains” and would have no application where the loss is determined while giving effect to the orders of the appellate authorities.
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