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2013 (1) TMI 510 - AT - Income TaxSurvey u/s 133A - unaccounted income - whether the surrender income of Rs. 70.00 lakhs should be treated as business income so as to set off brought forward losses u/s 70 of the Act as well as the depreciation u/s 32(2) - Held that:- Once the item of receipt is held to be falling under a particular head then the same cannot be charged alternatively under another head particularly under the head "income from other sources". This observation cannot lead to the conclusion if income does not belong to a particular head same cannot be charged at all. See Kim Pharma (P.) Ltd. (2013 (1) TMI 495 - PUNJAB AND HARYANA HIGH COURT) wherein clearly held that surrendered income can be taxed as deemed income without setting off of the losses u/s 70 & 71. Thus hold that surrendered income has to be assessed separately as deemed income - against assessee. Setting off of depreciation u/s 32(2) - Held that:- The provision for carry forward and set-off of unabsorbed depreciation for any number of years against income under any head, was further diluted by way of clause (iii)(b) to section 32(2) restricting the right to set-off of unabsorbed depreciation for a period of not more than eight assessment years succeeding the assessment year in which the allowance was first computed - Thus it is clear that unabsorbed depreciation for the block of Assessment year 1997-98 to 2001-02 which could not have been set off earlier, cannot be allowed to be set off now. Therefore, set aside the order of the CIT(A) and remit the matter back to the file of AO with a direction to only allow set off of unabsorbed depreciation which is outside the block of Assessment year 1997-98 to 2001-02 - See CIT, Kanpur Versus Mother India Refrigeration Industries Private Limited [1985 (8) TMI 2 - SUPREME COURT] - partly in favour of assessee.
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