TaxTMI 
TaxTMI 
TaxTMI 
2016 (12) TMI 1477
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....stified in upholding the order of the AO and not giving relief by adjusting brought forward unabsorbed depreciation loss against current year's income. 4. That the appellant craves leave to add, amend or alter any of the grounds of appeal. 3. The brief facts of the case are that return declaring NIL income was e-filed on 10.9.2012. The case was selected for scrutiny through CASS. Notice under section 143(2) was issued on 19.8.2013, which was duly served upon the assessee. In response thereto the Assessee's AR attended the hearing. He was required to file copies of ITR, audit report, balance sheet etc. which were filed on 9.12.2013. Consequent upon the jurisdiction orders dated 15.11.2014 passed by the ld. CIT, Noida the case records was transferred to ITO, Wards 3(3), New Delhi. Notices under section 142(1) and 143(2) were issued but adjourned on several times. Therefore, a notice under section 144 was issued on 27.2.2015 fixing date of compliance on 9.3.2015. On 9.3.2015 the assessee's AR filed letter dated 9.3.2015. Therefore, the proceedings were decided under section 144 of the Income Tax Act, 1961. In the return of income the assessee has declared income from house property ....
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....2) 27 Taxmann.com 242 (Mad.); order of ITAT Delhi in the case of ITO vs. Selchem Engineers (P) Ltd. (2004) 90 ITD 732 (Delhi); Hon'ble Gujrat High Court in the case of CIT vs. Farbiquip (P) Ltd. (2002) 123 Taxman 820 (Gujarat); ITAT, Kolkata in the case of JCIT vs. India Stemship Co. Ltd. (2003) 129 Taxman 158 (MAG) Kolkata; ITAT, Bombay High Court in the case of ITO vs. Graham Firth Steel Products (I) Ltd. (2008) 24 SOT 106 (TBOM); Hon'ble High Court of Delhi in the case of Escorts Electronics Ltd. vs. CIT 258 ITR 23 (Del.). He stated that in the aforesaid decisions the issue in dispute i.e. set off unabsorbed depreciation is squarely covered wherein unabsorbed depreciation has been adjusted against income from house property or income from other sources. 7. On the other hand, Ld. DR relied upon the orders of the authorities below. 8. I have heard both the parties and perused the records available with me, especially the orders of the revenue authorities and the citations relied upon by the Ld. Counsel of the assessee. I find that during the assessment year 2012-13 the assessee filed the return of income declaring income from house property of Rs. 6,30,000/- and losses from busi....
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....he fact that as far as the income from other sources are concerned, there could be no set off of business loss or carried forward loss. However, what is contended by the Revenue is that Section 72(2) controls the operation of Section 32(2) to have the set off of unabsorbed depreciation against the income from other sources. We do not agree with this line of reasoning. What is spoken to under Section 72(2) is as regards set off of business loss as against the income from profits and gains of business or profession and if there is loss as well as unabsorbed depreciation, the set off shall be first on the business loss as against the business income and then on unabsorbed depreciation. What is spoken to under Section 32(2) is as regards set off of unabsorbed depreciation as per clause (ii) of sub-section (1) and when the unabsorbed depreciation could not be set off as against the income from business or profession by reason of there being no income available under the said heads and where there is income from other sources, effect must be given to Section 32(2) of the Act for that assessment year. ii) ITO V s Selchem Engineers (P) Ltd., (2004) 90 ITD 732 (Delhi) 7. In the present ....
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....t the express provision of the Act and, therefore, the same is not binding on him. 10. Current depreciation is deductible in the first place from the income of the business to which it relates. If such depreciation amount is larger than the amount of the profits of that business, then such excess comes for absorption from the profits and gains from any other business or business, if any, carried on by the assessee. If a balance is left even thereafter, that becomes deductible from out of income from any source under any of the other heads of income during that year. In case there is a still balance left over, it is to be treated as unabsorbed depreciation and it is taken to the next succeeding year. Where there is current depreciation for such succeeding year the unabsorbed depreciation is added to the current depreciation for such succeeding year and is deemed as part thereof. If, however, there is no current depreciation for such succeeding year, the unabsorbed depreciation becomes the depreciation allowance for such succeeding year. In this connection the decision of the Hon'ble Bombay High Court in CIT v. Ravi Industries Ltd. [1963] 49 ITR 145 (Born.) may be referred to. ....
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....Bill, 1996 in the Lok Sabha and giving harmonious meaning and reasoning to the amended section 32(2) brought into effect on and from 1-4-1997, we are of the considered view that the depreciation allowance allowed to the assessee up to and inclusive assessment year 1996-97 which remained unabsorbed and is brought forward to the assessment year 1997-98 and subsequent assessment years up to assessment year 2004-05 can be set off as per pre-amended section 32(2) and, consequently, it can, be set off against taxable business profits or income under any other head for assessment year 1997-98 and seven subsequent assessment years. Therefore, the assessee's claim, in the present case, to set off unabsorbed depreciation brought forward from (assessment year 1995-96 and 1996-97) against income under 'House Property' for the assessment year 1998-99 is to be allowed, and, we order accordingly. Consequently, the issue involved in the Gross Objection filed by the assessee is decided in favour of the assessee. Before parting with the issue, we may put it on record that we have noticed a decision where a similar view has been taken by the Income-tax Appellate Tribunal, Delhi Bench in t....