GARDEN SILK WEAVING FACTORY, SURAT vs COMMISSIONER OF INCOME TAX,GUJARAT, AHMEDABAD

The Supreme Court addressed the interpretation of Sections 32(2) and 72(2) of the Income Tax Act, 1961, clarifying the distinction between unabsorbed depreciation and unabsorbed business loss. The Court held that a registered firm is entitled to carry forward unabsorbed depreciation for set-off against future income, while unabsorbed business loss cannot be carried forward if not claimed in the original return. The judgment affirmed the decision of the Income Tax Appellate Tribunal regarding the treatment of unabsorbed depreciation, thus allowing the appeal in part.