TaxTMI 
TaxTMI 
2012 (12) TMI 81
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....mpute the income after allowing set off of unabsorbed depreciation from income from other sources, especially, when carry forward losses remained? 2. Whether the provisions of Section 32(2) can be given effect to, ignoring the provisions of Section 72(2) of the Income Tax Act?" 2. The assessee is engaged in the business of manufacture of semi-conductors. Admittedly the assessee has claimed set off of unabsorbed depreciation from the assessment years 1990-91 to 1997-98 for more than Rs.13 crores and unabsorbed loss for Rs.18 crores relating to assessment year 1995-96 to 1997-98. While recomputing the income for the assessment year 1998-99, the Assessing Officer adjusted the loss brought forward from 1995-96 and 1996-97 t....
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....ch is relevant for the case on hand, reads as follows:- 32(2) Where in the assessment of the assessee full effect cannot be given to any allowance under clause (ii) of sub section (1) in any previous year owing to there being no profits or gains chargeable for that previous year or owing to the profits or gains being less than the allowance, then, the allowance or the part of allowance to which effect has not been given (hereinafter referred to as unabsorbed depreciation allowance), as the case may be,- (i) shall be set off against the profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year; (ii) if the unabsorbed depreciat....
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....iation allowance as per Section 32(2) could be given effect to only after giving relief on the carried forward loss. Given the fact that the carried forward of business loss could be adjusted only as against the business income, if there is no other income available, then as per Section 72(2) of the Act, unabsorbed depreciation has to wait for further years subject to the limitation of eight years for absorbing the same in the business income of the assessee. However, in a case of assessee as one before us, when the assessee has income both from business as well as from other sources, that after having set off of the business loss as against the current year income from business, there existed no further business income, the carried forward....