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2012 (11) TMI 674 - AT - Income TaxSet off and Carry forward of Business loss as well as current year's depreciation against Long Term capital gains – held that:- legal fiction created by provisions of Sec. 32(2) of the Act has been subjected to the provisions of Sec. 72(2) and 73(3) of the Act.In case of set off of business loss vis-a-vis depreciation, the first preference shall be given to the business loss as per the provisions of Sec. 72(1) of the Act for the simple reason that the business loss can be carried forward only upto 8 assessment years whereas the depreciation can be carried over upto unlimited period. Brought forward unabsorbed depreciation is treated as current years' depreciation because of the legal fiction, therefore the treatment given to the current year's depreciation is equally applicable to brought forward depreciation after the application of Finance Act, 2001 - current year's depreciation is to be allowed as set off from the Long Term Capital Gains and brought forward depreciation is to be treated as current year's depreciation as per the legal fiction of section 32(2), the same is also to be allowed to be set off from the Long Term Capital Gains - In the result, appeal filed by assessee is allowed.
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