TaxTMI 
TaxTMI 
2023 (3) TMI 315
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat on the facts and circumstances of the case the Ld. CIT(A) erred in agreeing with AO in disallowing set off of unabsorbed depreciation of Rs. 952839/- from income from other sources ignoring the mandate of section 32(2) read with section 72(2) of I.T. ACT, 1961 and settled law. The same be allowed in full. (2)(b) That on the facts and circumstances of the case the Ld. CIT(A) erred in agreeing with AO in ignoring that in case of both B/F business loss and unabsorbed depreciation scenario, the set off with business income should be with B/F business loss in view of section 72(2) first and not assessment year wise taking both B/F business loss and unabsorbed depreciation together. The deduction of Rs. 952839/- be allowed in full. (3) (a) That on the facts and circumstance of the case the Ld. CIT(A) erred in agreeing with AO in not allowing deduction u/s. 115JB of Rs. 2420618/- without considering the written submissions made but relying on submission which were never made by appellant. The same be allowed in full. (3) (b) That on the facts and circumstances of the case the Ld. CIT(A) erred in agreeing with AO in not allowing deduction of unabsorbed deprec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sed at Rs. 1,93,31,345/- as against the business loss shown by the assessee at Rs. 1,94,82,486/-. When assessment for A.Y. 2011-12 was completed, the set off of business loss and brought forward unabsorbed depreciation computed by the Ld. Assessing Officer in the following manner:- 8. Before dealing with the issue that what is the correct amount of set off available to assessee, we would like to go through the provisions of section 72 of the Act:- "Carry forward and set off of business losses. 72. (1) Where for any assessment year, the net result of the computation under the head" Profits and gains of business or profession" is a loss to the assessee, not being a loss sustained in a speculation business, and such loss cannot be or is not wholly set off against income under any head of income in accordance with the provisions of section 71, so much of the loss as has not been so set off or, where he has no income under any other head, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and- (i) it shall be set off against the profits and gains, if any, of any business or profession ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h the computation of income as abstracted above, we find that against the positive income of Rs. 2,83,08,208/-, the assessee claimed set off of total brought forward business loss for A.Y. 2009-10 at Rs. 1,94,82,486/- and available amount of the brought forward business loss was for A.Y. 2010-11. So far as the unabsorbed depreciation brought forward from the preceding year is concerned, the assessee claimed set off of this amount against the income from short-term capital gain and income from other sources at Rs. 3,11,219/- and Rs. 13,85,865/- respectively. We also notice that after the filing of return of income by the assessee for A.Y. 2011-12 claiming brought forward business loss and brought forward unabsorbed depreciation, the assessments for A.Y. 2009-10 and 2011-12 were completed and for A.Y. 2009-10 business loss was assessed at Rs. 1,93,31,345/- as against the business loss claimed by the assessee for A.Y. 2009-10 at Rs. 1,94,82,486/- and for A.Y. 2010-11, there was no change in business loss declared by assessee at Rs. 1,15,92,839/-. The Ld. Assessing Officer while giving effect to the brought forward business loss and unabsorbed depreciation has adopted the figure of ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....brought forward loss for A.Y. 2009-10, which has been assessed at Rs. 1,93,31,345/-. In other words, as against the business income for A.Y. 2011-12 at Rs. 2,83,08,208/-, the assessee is eligible for set off of assessed business loss of Rs. 1,93,31,345/- and set off of balance amount of unabsorbed business loss for A.Y. 2010-11 at Rs. 89,76,863/-, which will thus leave balance of unabsorbed business loss to be carried forward for A.Y. 2011-11 at Rs. 26,15,976/-. As regards the unabsorbed depreciation is concerned, the claim made by the assessee is correct and the Ld. Assessing Officer is directed to accept the same. 10. The next issue for our consideration is regarding not allowing deduction under section 115JB of the Act towards unabsorbed depreciation at Rs. 24,20,618/-. We notice that Ld. Assessing Officer denied this deduction on the basis of his observation that deficit as to profit & loss account of the assessee at Rs. 81,00,194/- has already been adjusted in the previous year ending on 31.03.2010 with the general reserve of that year and as a result of such adjustment, entire deficit is wiped off and there remains no trace of either unabsorbed loss or unabsorbed depreciat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h loss and depreciation loss needs to be worked out and reviewed and accordingly the understanding of the Learned AO that such loss once adjusted in earlier year is no longer available for set off is misconceived. Hence we do not find any infirmity in the order of the Learned CIT(A) in this regard. The Ground No. 2 raised by the revenue is dismissed". 12. From perusal of the above decision, we find force in the contention of the Ld. Counsel for the assessee and find that the assessee has rightly claimed deduction of unabsorbed depreciation at Rs. 24,20,618/- (A.Y. 2009-10 at Rs. 14,28,430/- and A.Y. 2010-11 at Rs. 9,92,188/-) for the purpose of calculating MAT. Thus Ground No. 3 raised by the assessee is allowed. 13. In the result, the appeal of the assessee is allowed as per terms indicated above. Order pronounced in the open Court on 22nd February , 2023. ============= Document 1 COMPUTATION OF INCOME OF M/S/ MILLINNIUM STOCK BROKING PVT.LTD. FOR ASST. YEAR 2011-2012 (ACCOUNT YEAR ENDED 31.03.2011) A.BUSINESS Net Profit as per P/L Accounts 19308081 Add: Speculations Loss Add: Depreciation as per Cos. Act Add: Expenses added u/s 14A Less: B....