TaxTMI 
TaxTMI 
TaxTMI 
2014 (6) TMI 1034
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....s etc., on the ground that appellant is not carrying on any business and income of the appellant is assessable under the head "Income from other sources". Your appellant submits that the expenses as claimed by your appellant are allowable as deduction while computing the income under the head "Income from other sources" and therefore prays your Honour to kindly hold so now and direct the ld.A.O. to allow the deductions of expenses as claimed by your appellant. 2.0 On the facts and in the circumstances of your appellant's case and in law, the ld.CIT(Appeals) has erred upholding the decision of not allowing set off of brought forward unabsorbed depreciation u/s.32(2) of the Act against "income from other sources" on the ground that appellant is ceased to be in business. Appellant submits that as per the provisions of S.32(2) of the Act, appellant is entitled to set off of brought forward unabsorbed depreciation of past years against its income assessed under head "Income from other sources", since as per the said S.32(2), such brought forward unabsorbed depreciation is deemed depreciation of the year under appeal even in cases where there is "no profits or gains chargeable f....
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....f its order dated 13/01/2012 has observed as under:- "8. In the light of these two decisions, we have also examined the accounts made available before us and noticed that in Schedule-19 under the head "Liquidator's Account" an expenditure of Rs. 34.80 lacs was towards interest on Government of India loan. However, as per Scheduel-6 under the head "Unsecured Loans", we have noticed that there was no change in the amounts outstanding as on 31/03/2003 and 31/03/2004 of Rs. 13,283.78 lacs. We have also noted that the amount of interest accrued was also identical in figures, found to be outstanding as on 31/03/2003 and 31/03/2004 of Rs. 1,906.54 lacs. Meaning thereby that there was no accrual of interest liability, though admittedly the ld.AR has stated before us that "mercantile system" of accounting was adopted by the assessee. In that case, the assessee has to prove the basis on which the interest expenditure of Rs. 34.80 lacs was claimed. A.O. is hereby directed to proceed accordingly as per law." 5.1. In respect of the interest portion, since the facts are identical in this year also, we restore this issue back to the file of AO in the light of the decision passed by the Tribu....
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....ce on the judgement of Hon'ble Supreme Court rendered in the case of CIT vs. Virmani Industries Pvt.Ltd. reported at (1995) 216 ITR 0607(SC) and the judgement of Hon'ble Gujarat High Court rendered in the case of CIT vs. Deepak Textile Industries Ltd. reported at (1987) 168 ITR 0773(Guj.). 6.1. On the contrary, ld.Sr.DR supported the orders of the authorities below. 7. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A) has decided this issue by observing as under:- "5.1. It is seen from the records that the same issue has been considered and decided upon by CIT(II), Baroda in appellant's own case in appeal number CAB/II-372/06-07 for the AY 2004-05 in which he has upheld the action of the AO of not allowing set off of unabsorbed appreciation and carried forward business losses against the income of the appellant for this year, on the basis that since appellant have no business activity since AY 1997-98, depreciation for earlier years cannot be set off from income from other sources. In the absence of any business, no income is taxable in business head and hence the dep....
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....the next year and "added to the amount of the allowance for depreciation for the following previous year and deemed to be part of that allowance" the sub-section necessarily contemplates existence of a business in the following year, and (2) inasmuch as the sub-section not only speaks of adding the unabsorbed depreciation to the depreciation allowance allowed in the following year but also says that in the absence of such allowance, the carried forward depreciation allowance shall be the allowance for that year, it means that in the following year the assessee need not carry on any business or profession for availing of the benefit of sub-section (2) of section 32. We are inclined to adopt the second of the above two views having regard to the decisions of this Court in Jaipuria China Clay Mines (P.) Ltd.'s case (1966) 59 ITR 555 and Rajapalayam Mills Ltd.'s case (1978) 115 ITR 777. We have extracted the relevant observations from both the judgements hereinabove, which say that the unabsorbed depreciation allowance has not only to be set off against other heads of income in the relevant previous year but where it is carried forward, it "stands on exactly the same footing as the cur....
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....e head "Income from other sources". Your appellant submits that the expenses as claimed by your appellant are allowable as deduction while computing the income under the head "Income from other sources" and therefore prays your Honour to kindly hold so now and direct the ld.A.O. to allow the deductions of expenses as claimed by your appellant. 2.0 On the facts and in the circumstances of your appellant's case and in law, the ld.CIT(Appeals) has erred upholding the decision of not allowing set off of brought forward unabsorbed depreciation u/s.32(2) of the Act against "income from other sources" on the ground that appellant is ceased to be in business. Appellant submits that as per the section 32(2) of the Act, appellant is entitled to set off of brought forward unabsorbed depreciation of past years against its income assessed under head "Income from other sources:, since as per the said S.32(2), such brought forward unabsorbed depreciation is deemed depreciation of the year under appeal even in cases where there is "no profits or gains chargeable for that previous year" or there is no allowance for that previous year". Therefore, appellant prays your Honour to hold so now ....
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....shnan Vs. M.Krishnamurthy reported at (1998) 7 SCC 123. 9.2. On the contrary, Sr.ld.DR opposed the application and submitted that there is no reasonable cause for condoning the delay. 10. We have heard the rival contentions. The Hon'ble Supreme Court in the case of N.Balakrishnan vs. M.Krishnamurthy (supra) has held as under:- "It must be remembered that in every case of delay, there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy, the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gain time, then the court should lean against acceptance of the explanation. While condoning the delay, the court should not forget the opposite party altogether. It must be borne in mind that he is a loser and he too would have incurred quite large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant, the court shall compen....