2014 (2) TMI 684

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....T(A) has erred in law by allowing to set off unabsorbed depreciation relating to AY 2000-01 and 2001-02 against the income from other sources by ignoring the order dated 29.04.2011 of the Hon'ble ITAT, Delhi Bench "C" New Delhi in ITA No. 4983/Del/2010 in the case of ACIT, Circle-I, Muzaffarnagar vs M/s HRJ Steels(P) Ltd. Muzaffarnagar where it was held that amount of current depreciation for AY 1997-98 to 2001-02 which cannot be set off shall be carried forward for a maximum period of 8 assessment years and to be set off only against the income under the head profit and gain of business or profession. 2. The order of the Commissioner of Income Tax(A) be set aside and that of Assessing Officer be restored." 3. Briefly stated the facts....

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....an appeal before the Commissioner of Income Tax(A), Muzaffarnagar which was partly allowed. The Commissioner of Income Tax(A) held that the income from transaction of sale of land cannot be treated as business income but it is to be assessed under the head of income from other sources. On the issue of set off of income against brought forward business loss/unabsorbed depreciation, the Commissioner of Income Tax(A) held that the unabsorbed depreciation/business loss is to be allowed for set off against income from other sources and the balance unabsorbed depreciation/business loss is to be allowed to be carried forward to the subsequent years. Now, the aggrieved revenue is before this Tribunal in the second appeal with the grounds as reprodu....

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....83/Del/2010 for AY 2004-05 dated 29.4.2011, the assessee can claim set off of unabsorbed depreciation against income under any head other than profits and gains of business or profession, provided the same is related to the assessment year prior to 1997-98 or to the AY 2002-03 and thereafter. The relevant operative part of above judgment of ITAT 'C' Bench Delhi reads as under:- "14. Adverting to the facts of the present case, we find that the assessee has also claimed set off of unabsorbed depreciation arose in the second period i.e. AY 197-98 to 2001-02, which was not adjusted against the income under the head "profits and gains of business or profession" prior to the AY 2004-05 under consideration. Therefore, now, the assessee cannot c....

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....cial Bench in the case of DCIT Vs. Times Guaranty Limited (supra). We direct accordingly." 7. From the impugned order, we observe that the Commissioner of Income Tax(A) has relied on its own judgment in the case of M/s Parijat Paper Mills Ltd., Muzaffarnagar in Appeal No. 33/09-10/MZR dated 12.08.2010 for AY 2007-08. On specific query from the Bench, ld. DR as well as counsel appearing for the assessee submitted that the above order of ITAT Delhi 'C' Bench in the case of ACIT vs M/s HRJ Steels Pvt. Ltd. has not been set aside or modified by any higher forum. Thus, we are of the considered opinion that the judgment of ITAT 'C' Bench Delhi holds the field and the issue involved in the present appeal is squarely covered by this judgment. Ac....