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2015 (11) TMI 1064 - AT - Income TaxRevision u/s 263 - depreciation set off claim - assessee’s argument is that its income from other sources in question comes u/s. 56(2)(iii) of the Act which in turn is entitled for Section 32(1) & (2) depreciation claim as per Section 57 (ii) - Held that:- The assessee has derived its lease rental income under the head from “other” sources. There is no dispute that the same is covered u/s.56(2)(iii) of the Act. This is followed by Section 57 stipulating allowability of corresponding depreciation relief u/s.32(1) & (2) of the Act. The CIT holds that the assessee’s business as it existed earlier of manufacturing is no longer in existence or the same is not being carried out in the impugned assessment year so as to claim depreciation relief u/s.32(1) & (2) of the Act. We notice from case law of Fabriquik (2002 (7) TMI 27 - GUJARAT High Court) that their lordships consider earlier decisions of CIT vs. Deepak Textile Industries Ltd. (1987 (8) TMI 81 - GUJARAT High Court) and CIT vs. Virmani Industries Pvt. Ltd. [1995 (10) TMI 1 - SUPREME Court] holding that in order to avail Section 32(2) depreciation claim, it is not necessary that the business carried on in the following previous year should be the same as it was carried on the preceding previous year. And also that there are no words to that effect in the relevant statutory provision as well. The jurisdictional high court is of the view that an assessee need not carry on any business or profession for availing this benefit in the following year. The Revenue fails to point out any exception thereto. We accordingly accept assessee’s latter two arguments on merits and hold it entitled for the impugned depreciation benefit. Its legal plea of merger principle (supra) is rendered infructuous. The CIT’s order under challenged passed u/s.263 of the Act stands reversed accordingly. - Decided in favour of assessee.
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