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2013 (3) TMI 349 - HC - Income TaxJurisdiction power u/s 263 by CIT(A) - as per CIT(A) the set off of unabsorbed depreciation and investment allowance is to be restricted to 2/3rd of such allowance and it is not permissible to be set off against any head of income other than the income from business and profession - ITAT set aside the order under section 263 of CIT(A) - Held that:- Section 71(2) contemplates a situation where in respect of any assessment year, the net result of computation under any head of income, other than capital gains “Capital gains”, is a loss and the assessee has income assessable under the head “Capital gains”, In such a situation, such loss may, subject to the provisions of this Chapter, be set off for and from assessment years 1992-1993, against assessee's income if any, assessable for that assessment year under any head of income including the head “Capital gains”. The brought forward unabsorbed depreciation and brought forward investment allowance shall be added in the current depreciation and investment allowance be set off against the income from capital gains. The business income is a loss. The view taken by the Tribunal is therefore, fully justified proceeded to decide the appeal on the footing that the law provides to give full effect to the unabsorbed depreciation and investment allowance as per provisions of Section 32(2)/Section 32A (3) whereas under Section 34A it is 2/3rd of. It held that the view taken by the CIT that set off to 2/3rd of the unabsorbed depreciation and investment allowance is permissible only against the income from the business and profession and not from the income under the head “income from other sources. No merit in the argument of the appellant which proceeds on the footing that business loss and unabsorbed depreciation and unabsorbed investment allowance are one and the same thing. In this view of the matter, the Commissioner of Income Tax was not justified in invoking the jurisdiction under section 263 of the Income Tax Act or not allowing the unabsorbed depreciation against income from capital gains to the extent of admissibility to Rs.66.67 %.
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