Tribunal Upholds Setoff of Depreciation Against Capital Gains

The Tribunal dismissed the Revenue's appeal and the assessee's cross objection. It upheld the direction to allow set off and carry forward of depreciation against long term capital gains, citing relevant legal precedents and provisions. The Tribunal found the Assessing Officer's rejection of the legal precedents unacceptable and directed the allowance of the claim for the relevant assessment year. The cross objection on the reopening of assessment was deemed unnecessary and dismissed as the Revenue's appeal was dismissed on its merits. The judgment was pronounced on 22nd June 2016.

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Issues involved:
1. Appeal and cross objection against the orders of the Commissioner of Income Tax (Appeals).
2. Revenue's appeal regarding the set off of depreciation loss against long term capital gains.
3. Assessee's cross objection against the reopening of assessment under section 147 of the Act.

Analysis:
1. The appeal and cross objection were filed against the orders of the Commissioner of Income Tax (Appeals). The Revenue raised concerns regarding the direction to allow set off of depreciation loss against long term capital gains. On the other hand, the assessee disputed the sustaining of the order for reopening the assessment under section 147 of the Act.

2. The main issue in the Revenue's appeal was the direction given by the Commissioner of Income Tax (Appeals) to allow the set off of brought forward depreciation loss against long term capital gains. The Revenue contended that the Assessing Officer had denied the set off as the carried forward depreciation loss could only be set off up to the assessment year 2001-02. However, the assessee cited relevant legal precedents and provisions to support their claim for the set off beyond the specified limit.

3. In response to the Revenue's appeal, the Tribunal referred to significant decisions, including those of the Mumbai Special Bench and the High Court of Gujarat, supporting the assessee's position on the issue of depreciation set off against long term capital gains. The Tribunal emphasized that the Assessing Officer's rejection of the legal precedents cited by the assessee was not acceptable. Consequently, the Tribunal directed the Assessing Officer to allow the claim of set off and carry forward of depreciation against the long term capital gain for the relevant assessment year.

4. Regarding the cross objection raised by the assessee against the reopening of the assessment, the Tribunal deemed it unnecessary to adjudicate on this issue as the appeal of the Revenue was dismissed on its merits. Therefore, the Tribunal also dismissed the cross objection raised by the assessee, considering it as merely academic in the given context.

5. In conclusion, the Tribunal dismissed the appeal of the Revenue and the cross objection of the assessee, based on the merits of the case and the decision to allow the set off and carry forward of depreciation against long term capital gains. The judgment was pronounced on 22nd June 2016.

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