The concept of passive use could not be extended for twenty four years , when the asseseee’s unit had remained closed , especially when one of the conditions are found from S. 32(1) is the requirement of user of the tangible or other assets , in the previous year in which the deduction or allowance is claimed. Accordingly the assessee is not entitle to set off the carried forward unabsorbed depreciation. (AY. 1985-86, 1996-97 to 2002-03)
CIT v. Punalur Paper Mills Ltd. (2019) 411 ITR 563 /176 DTR 342/ 309 CTR 42(Ker.)(HC)
S. 32 : Depreciation—Concept of passive user cannot be extended for long period—No allowance of depreciation in particular year— unabsorbed depreciation cannot be carried forward. [S. 32(2)]