Question before the High Court was “Whether on the facts and circumstances of the case and in law, the Tribunal was justified in directing the Assessing Officer to allow carry forward and set-off of unabsorbed depreciation of Assessment Year 1999-2000 and Assessment Year 2000-2001 against the profits of Assessment Year 2009- 2010 without appreciating that as per the provisions of Section 32(2) as they stood prior to the amendment by Finance Act, 2001 w.e.f. 01.04.2002, such unabsorbed depreciation was eligible for carry forward and set-off against business profits only for a further period of eight years ?”

Department  relied  upon the orders  in the case of CIT  v.  Milton Pvt Ltd  (ITA No.2301 of 2013) and CIT v. Confidence Petroleum India Ltd. (ITA  No. 582 of 2014), both of which were admitted on similar questions of law on 24th February, 2017 and 3rd April, 2017 respectively accordingly the matter may be referred to larger Bench .

Honourable Court held that the issue referred above is concluded by the decision of Bombay High Court in CIT v. Hindustan Unilever Ltd (2017 ) 394 ITR 73 (Bom) (HC), placing reliance upon the decisions of the Gujarat High Court in  Dy. CIT v. General Motors India P. Ltd (2013)  354 ITR 244 (Guj) (HC )and the CBDT Circular No.14 of 2001  dt. 22-11- 2001.  Court also observed that the  revenue was not able to point out any reason as to why the decision of the Gujarat High Court in General Motors (I) Ltd. (supra) should not be followed. In the above facts, the appeal of the Revenue was dismissed. Court also observed  appeals filed by the Revenue on identical question of law were not entertained by following the decisions , Hindustan Unilever Ltd. (supra) CIT v. Arch Fine Chemicals Pvt. Ltd.(ITA No. 1037 of 2016 dt.6-12.2016) CIT v. Bajaj Hindustan Ltd ( ITA  No. 134 of 2016, 135 of 2016, 136 of 2016, 140 of 2016, 141 of 2016 and 148 of 2016) on on 13th June, 2018 .PCIT  v.. Hindustan Antibiotics Ltd , ITA No  1042 of 2015 dt.  20 -02-2018 . Court also  held that merely filing of an SLP from the order of Hindustan Unilever Ltd. (supra) would not make the order of this Court bad in law or give a license to the Revenue to proceed on the basis that the order is stayed and/or in abeyance. The Revenue is entitled to challenge the view taken by us following our decision in Hindustan Unilever (supra) by challenging this decision in the Apex Court. However, in the present facts, at this stage, there can be no question of our not following the order in Hindustan Unilever (supra). It may be pointed out that the Delhi High Court in Motor and General Fine Ltd. v. ITO (2017 ) 393 ITR 60 ( Delhi )(HC has also adopted the view of the Gujarat High Court in General Motors (supra). Unabsorbed depreciation is allowed  to be set off . Accordingly the appeal of revenue was dismissed .( ITXA­ No 293 of 2016  dt. 03.08.2018)

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