TaxTMI 
TaxTMI 
2014 (12) TMI 1011
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....nvolve a common issue and the same, therefore, have been heard together and are being disposed of by a single consolidated order for the sake of convenience. 2. The solitary common issue involved in all these four appeals relate to the assessee's claim for set off of unabsorbed depreciation pertaining to the earlier years, i.e. assessment years 2003-04 and 2004-05 against the income assessed to tax in all the four years under consideration under the head 'income from other sources'. 3. The assessee in the present case is a company which was earlier engaged in the business of running an educational institute upto assessment year 2004-05. From assessment year 2005-06 onwards, the said activity was discontinued by the assessee company an....
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....ficer on account of the assessee's claim for set off of unabsorbed depreciation pertaining to assessment years 2003-04 and 2004-05 against the rental income assessed under the head 'other sources' in all the four years under consideration. Aggrieved by the orders of the learned CIT(A), the assessee has preferred these appeals before the Tribunal for assessment years 2006-07 to 2009-10. 5. The learned counsel for the assessee, at the outset, relied on the relevant provisions of S.57(ii) of the Act in support of the assessee's claim for set off of unabsorbed depreciation pertaining to assessment years 2003-04 and 2004-05 against the income from lease rents assessed to tax under the head 'income from other sources' in all the four years und....
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....ent year 1965-66, the assessee claimed that the unabsorbed to the extent of pertained to the old machinery utilized in the new business, should be brought forward and set off against the profits of the new business. This claim was rejected by the ITO and by the Appellate Asst. Commissioner. The Tribunal upheld the assessee's claim and the High Court affirmed the decision of the Tribunal. On appeal to the Supreme Court decided the issue in favour of the assessee. There cannot be any dispute in regard to the observations of the Apex Court in view of the fact that the factual matrix. In the present case, the factual position was clear that there was no business activity of any kind during the year in question and there is only a speculativ....
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....o tax under the head 'profits and gains of business or profession' but to as chargeable under the head 'Income from other sources'. From such income the assessee was entitled to deduction in respect of expenditure and depreciation in accordance with section 32(2). The specific mention of section 32(2) in section 57 permits deduction of the unabsorbed carry forward depreciation of earlier years from the income received form plant, machineries or furniture let out. There is no bar or limitation in section 57(ii)." 8. It is also observed that Hon'ble Madras High Court has decided a similar issue in favour of the assessee in the case of CIT V/s. Spel Semi Conductor limited (supra), after considering the relevant provisions of the Act, as....
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....kai Flavours & Aromatics (P)Ltd (supra), and the same was decided in favour of the assessee in the Third member decision of the Cochin Bench of the Tribunal, in the following manner- "9. ......A plain reading of the provisions of sections 32(2) and 72(2) makes it clear that first brought forward loss would be adjusted and after that brought forward unabsorbed depreciation would be set off. The provisions of section 32(2) reads that the unabsorbed depreciation would be deemed as current depreciation and has to be allowed the set off of unabsorbed depreciation not only with the business income of the current year but also with the income under any other head. There is no provision in law which lays down that unabsorbed depreciation would n....
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.... and circumstances of the case and hold that he grounds of appeal of the assessee relating to the issue of set-off of the unabsorbed depreciation gains against the income from other sources are allowed." 10. It is thus clear that although the decision of the coordinate bench of this Tribunal in assessee's own case for assessment year 2005-06 is against the assessee on the common issue involved in these appeals, a similar issue has been decided by the Hon'ble Calcutta High Court in the case of Premchand Jute Mills Ltd.(supra) and the Hon'ble Madras High Court in the case of CIT V/s. Spel Semi Conductor limited (supra) in favour of the assessee. Keeping in view the views expressed by the higher judicial fora, besides the Third Member c....