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2015 (3) TMI 312 - AT - Income TaxDeduction u/s.80-IA - assessee claims that no part of the brought forward unabsorbed depreciation of ₹ 75.07 lacs pertains to the any of the two eligible undertakings, i.e., Tex International (TI) and Royal Energy Company Unit-1, the profit from which is admittedly at ₹ 39.03 lacs and ₹ 0.36 lacs respectively - in the view of the Revenue, the income of the eligible undertakings, being the TI unit and Royal Energy Unit No.1, as included in the GTI, cannot exceed ₹ 2,83,720/-, i.e., the amount assessable u/s.28 (Rs.77,90,882 - ₹ 75,07,162). Further, this would be irrespective of whether the brought forward unabsorbed depreciation of ₹ 75.07 lacs is in respect of the eligible or the non-eligible undertakings - Held that:- If the unabsorbed depreciation exceeds the business income of ₹ 77.91 lacs, the same would stand to be set off against the income assessable u/s.22 and/or section 56 in-as-much as the same, per the deeming of section 32(2), forms part of the current years’ depreciation, and is to be given effect to, save for a precedence to the provision of sections 72(2) & 73(3), which are inapplicable in the present case in-asmuch as there is no brought forward business loss. There is no occasion or need for the set off of unabsorbed deprecation against income assessable under other heads of income, i.e., under Chapters IV-C and IV-F, as the assessee claims or does. How, for instance, s. 70 come into play without first determining the income assessable u/s. 28, and which would only be after giving effect to the provision of s. 32. The charge of depreciation u/s.32, it must be appreciated, is one, single charge, i.e., irrespective of the different sources of income where-under it may arise and, accordingly, would, in terms of section 32(1) r/w s. 32(2), allowable under the income assessable u/s.28, which per section 29 is to be computed in accordance with the provisions contained in sections 30 to 43D. The provision of section 32(2) itself does not admit of such a course in-as-much as the brought forward depreciation claim merges with the current year’s depreciation, so that it is a single charge, to be allowed to the extent of the available profit. The profit of Units B-2 and B-3, therefore, cannot be, on account of unabsorbed depreciation, negative, but at best at nil. The said depreciation, in view of the available income from the other units (being Units A & B1), and in-as-much as it forms part of the current years’ depreciation allowance, has to be set off there-against. - Decided against assessee.
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