Seshasayee Paper & Board Ltd vs The Deputy Commissioner Of Income Tax

The Supreme Court held that under Section 32 of the Income Tax Act, 1961, unabsorbed depreciation must be set off before unabsorbed investment allowance when computing income. The Court affirmed the decisions of the lower authorities, including the Madras High Court, which ruled that the assessee's claim for unabsorbed investment allowance was not valid as the unabsorbed depreciation had not been claimed in the income-tax return. The appeal was dismissed, upholding the priority of unabsorbed depreciation over investment allowance.