COMMISSIONER OF INCOME TAX,MEERUT, ETC. ETC. vs M/S VIRMANI INDUSTRIES PRIVATE LIMITED, ETC. ETC.

The Supreme Court interpreted Section 32(2) of the Income-Tax Act, 1961, clarifying that unabsorbed depreciation can be carried forward and set off against profits of a new business, even if it is different from the previous business. The Court held that it is not necessary for the same business to continue or for the machinery that earned the depreciation to be used in the subsequent year, as long as some business is carried on. The High Court's affirmative ruling in favor of the assessee was upheld, allowing the set-off of unabsorbed depreciation against the profits of the new business.