Carried forward unabsorbed depreciation can be set off against income from other sources even after business cessation.

Unabsorbed depreciation carried forward from an earlier year remains available for set-off against income under other heads, including income from other sources, in later years. The Gujarat High Court followed its earlier decisions and held that liquidation of the assessee or cessation of the business in which the depreciation arose does not defeat the statutory carry-forward benefit. The assessee was therefore entitled to claim set-off of the carried forward depreciation against income assessed under the head "Income from other sources".

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Issues: Whether unabsorbed depreciation carried forward from an earlier assessment year could be set off against income under the head "Income from other sources" in later years, even though the assessee had gone into liquidation and the business had ceased.

Analysis: The Court followed its earlier decisions holding that unabsorbed depreciation remains available for set-off in subsequent years against income under other heads, including income from other sources, and that the disappearance or cessation of the business in which the depreciation arose does not defeat the statutory carry-forward benefit.

Conclusion: The assessee was entitled to claim set-off of the carried forward unabsorbed depreciation against income under the head "Income from other sources".

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