2014 (9) TMI 1059

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....ainst the unabsorbed depreciation loss. 3. The Commissioner of Income Tax (Appeals) has decided the issue as under: "4. Ground no. (d) is against the Assessing Officer withdrawing set off of addition made u/s. 68 of the I.T. Act against b/f. unabsorbed depreciation. In the original assessment, an addition of Rs. 32,87,109/- was made. Out of this, an addition of Rs. 13,80,000/- was made u/s. 68 of the I.T. Act. The A.O. had, in the original assessment, allowed set off of b/f. depreciation against all the additions made. However, he was of the opinion that set off had been wrongly allowed against income determined u/s. 68 and therefore income had been not assessed to that extent. He therefore reopened the assessment. 4.1. During t....

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....n subsequent years. Reading of secton-32 shows that b/f. depreciation loss merges with the depreciation of the current year and therefore becomes current year's business loss which is permitted to be set off against any income of the current year other than salary. Income determined u/s 68 of the I.T. Act is income under other sources. B/f. depreciation loss which merges with the current year's depreciation will therefore have to be allowed as a set off against the income determined u/s 68 of the I.T. Act. Rules of set off to be followed will be the one applicable in the year in which set off is being claimed. It is therefore held that appellant was entitled to the set off to b/f. depreciation loss against income determined u/s. 68 of t....