Karnataka Court March 1981 Judgments

Addl. Commissioner of Income-tax Vs. Kapila Textiles (P.) Ltd.

Court: Karnataka

Reported in: (1981)22CTR(Kar)76; ILR1981KAR671

Rama Jois, J. 1. The Income-tax Appellate Tribunal, Bangalore Bench, has referred the following question for the opinion of this court under Section 256(1) of the I.T. Act, 1961 (hereinafter referred to as ' the Act ') : ' Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the unabsorbed depreciation of past years can be set off against the profit under Section 41(2) assessable in the assessment year 1964-65 ' 2. Briefly stated, the facts of the case are as follows: The assessee is M/s. Kapila Textiles (P.) Ltd. It ceased to carry on its business in the year 1956 and went into liquidation on June 19, 1958. During the year 1957-58, there was unabsorbed depreciation carried forward which amounted to about Rs. 28.48 lakhs. On March 24,1961, the liquidator sold the building, plant and machinery in auction. But, actually, the sale deed was executed on May 9, 1963. The previous year for the assessment year 1964-65, with which th...