2013 (7) TMI 226 - CHATTISGARH HIGH COURT

Benefit u/s 32(2)(iii) - Partial cessation of business - set off of unabsorbed depreciation - Held that:- The provision mandates that business or profession for which the allowance was originally computed should be continued by the Assessee in the previous year - It nowhere mandates that business should continue for the entire year - In the present case, the Assessee did continue business up to 30.09.1998 - Legislature by not using the word 'entire' clearly showed its intention that it was not necessary that the business should be carried on for the entire year - Proviso does not prevent the Assessee from taking advantage of section 32(2)(iii), if the other conditions are satisfied - Decided in favour of Assessee.

Unabsorbed depreciation - Set off only against the profits and gains of any business or profession - Held that:- In calculating the income under a head, certain deductions can also be made - These deductions are provided in that particular head itself - Normally, loss under one head can be set off only against the profit in that head, unless it is so provided under any provision of the Act - Section 32(2)(i) provided that it could be set off against profits and gains, if any, of any business or profession carried on by the assessee and in case it could not be done then it could be set off from the income of the Assessee under any other head under section 32(2)(ii) of the Act - The unabsorbed depreciation allowance that could not be so set off, was to be carried forward for the next eight years under section 32(2)(iii)(b) - In section 32(2) (ii), any other income is specifically mentioned, but it is not so mentioned in section 32(2)(iii). This clearly shows the intention of the legislature that the carried forward unabsorbed depreciation allowance cannot be set off against income other than the income from profits and gains of business or profession - Decided against assessee.

Intention of legislature - Whether speech of the Finance Minister be taken into account, while interpreting a clear and unambiguous section - Held that:- Following decision of P.V. Narsimha Rao v. State [1998 (4) TMI 503 - SUPREME COURT], The intention of the legislature is to be seen from the use of the words in the statute. The question is not what might be intended but what has been said - it is the language of the statute that determines the legislative intention - Speech of a minister cannot be taken into account to interpret a provision that is clear and unambiguous.

Short-term capital gains as business income - Set Off of carried forward depreciation with short term capital gain from sale of depreciable assets - Held that:- Section 41(2) provides that in some cases of sale of buildings, machinery, plant or furniture, if the money payable exceeds the written down value of those assets, then it would be treated as income of the business of the previous year - Assessee was not engaged in generation or generation and distribution of power. It was manufacturing straw boards. In the present case, depreciation was not claimed under section 32(1)(i) of Act, but it was claimed under section 32(1)(ii) of the Act. Section 32(1)(i) as well as section 41(2) of the Act is not applicable here - Short term capital gain on sale of depreciable assets is not profits and gains of any business or profession - Carried forward unabsorbed depreciation cannot be set off with short-term capital gain - Only current unabsorbed depreciation can be set off against the 'Profits and gains of business or profession' as section 32(2)(ii) of the Act provides that it (current unabsorbed depreciation) can be set off with any other income. - Decided in favor of revenue.