TaxTMI 
TaxTMI 
2013 (5) TMI 975
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....made by Ld. Assessing Officer of Rs. 23,65,621/- as Long Term Capital Gain, Rs. 2,45,109/- as Short Term Capital Gain and not considering unabsorbed depreciation of Rs. 20031133/- for requisite set off. 3. Brief facts are that the assessee has transferred all its fixed assets for the block of land, plant and machinery and office equipments during the year, however, no capital gains were offered in this regard. Assessing Officer called for explanation. Assessee explained that the block of assets were transferred for consideration of Rs. 42,50 lacs and the WDV of the block was Rs. 76.95 lacs, thus, resulting in gross short term capital gains of Rs. 65.55 lacs. However, unabsorbed depreciation available for set off was Rs. 200,31,133/-. The....
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....ordance with law after giving the assessee an opportunity of being heard." 6. Accordingly, the matter was taken up by the Assessing Officer. The assessee was asked to file the requisite details and accordingly, Assessing Officer computed the capital gain as under:- "Long term capital gains: As per the provisions of section 50 of the Act it is ascertained that the sale of land does not come under the purview of short term capital gains as no depreciation is being claimed on it. Hence, the sale of land is taken under long term capital gains and the amount of long term capital gains is calculated as under:- Consideration of transfer of land Rs. 55,60,247/- Less: Indexed cost of acquisition Cost of acquisition x Cost of Index ....
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....the assessee for set off of unabsorbed depreciation carried forward from the A.Y. 1995-96 to 1997-98 for Rs. 89,36,000/- does not apply to this case cause as per the provisions of the sections 70 to 80 of the Act of carrying forward and set off of losses, the current year capital gain (long term and short term) cannot be set off from brought forward business loss or unabsorbed depreciation." 7. Upon assessee's appeal Ld. Commissioner of Income Tax (A) noted that the contention of the assessee that assessee was not required to file return of income for A.Y. 2001-02 to 2005-06 is not correct. That it is only from the return of income that the Department can know whether the assessee has earned any income or incurred any loss. When the asse....
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....carried forward from earlier years. The Assessing Officer has held that the set off of unabsorbed depreciation carried forward from A.Y. 1995-96 to 1997-98 for Rs. 89,36,000/- does not apply to this case, as per the provision of the sections 70 to 80 of the Act of carry forward and set off of losses. The current year capital gain (long term and short term) cannot be set off from brought forward business loss or unabsorbed depreciation. Upon assessee's appeal Ld. Commissioner of Income Tax (A) has affirmed the action of the Assessing Officer and has inter-alia observed that the assessee has not filed return of intervening period for A.Y. 2001-02 to 2005-06 and hence, assessee cannot be allowed to avail the set off of the unabsorbed depreciat....
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.... or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of sub-section (2) of section 72 and sub-section (3) of section 73, the allowance or the part of the allowance to which effect has not been given, as the case may be, shall be added to the amount of the allowance for depreciation for the following previous year and deemed to be part of that allowance, or if there is no such allowance for that previous year, be deemed to be the allowance for that previous year, and so on for the succeeding previous years." 12. We further find that the decision of the Hon'ble Punjab and Haryana High Court in the case of Haryana Hotels Ltd. (Supra) had dealt both with unabsorbed business loss and unab....
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....arlier previous years forms part of the current year's depreciation and thereafter allowance for depreciation is given from the current years' income. There is no such provision in s. 72 by virtue of which business losses of earlier years shall form part of the current year's business losses and be allowed to be set off from current year's income. However, only the business losses of earlier years which are notified by the Assessing Officer are allowed to be carried forward and set off from the current year's income. Similarly, there is no provision under the Act which makes it mandatory for the assessee to file return for carry forward and set off of unabsorbed depreciation which is to be notified by the Assessing Officer as in the case of....