Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (3) TMI 315 - AT - Income TaxIncorrect set off of brought forward business loss and unabsorbed depreciation - contention of assessee is that the said set off should have been provided as per provisions of section 72(2) - HELD THAT:- The working of the Ld. Assessing Officer contains the mistakes as they are not in consonance with the provision of section 72(2) of the Act. The correct method for adjustment of brought forward losses, which the Ld. Assessing Officer ought to have adopted, was to first set off the brought forward assessed business loss for A.Ys. 2009-10 and 2010-11 against the positive business income for the year under consideration and whatever remained should have been allowed to be carried forward for set off in subsequent years. As far as the unabsorbed depreciation is concerned, since the total brought forward business loss could not be said against the business income for the year under consideration, the unabsorbed depreciation is eligible for set off against the income under other heads, which in this case, are capital gain and income from other sources. Since AO has not adopted the correct method and not complied with the provisions of section 72(2) and Ld. CIT (Appeals) has also not considered the contention made by the assessee regarding the correct method of setting off of business loss and unabsorbed depreciation, we are of the view that the finding of the Ld. CIT (Appeals) on this issue needs to be reversed and the same is set aside and the grounds No. 2(a) to 2(b) of the appeal raised by the assessee are allowed. AO is directed to give effect of the brought forward business loss and unabsorbed depreciation as per the computation of income filed by the assessee with the only difference with regard to brought forward loss for A.Y. 2009-10, which has been assessed - as against the business income for A.Y. 2011-12 the assessee is eligible for set off of assessed business loss and set off of balance amount of unabsorbed business loss for A.Y. 2010-11 which will thus leave balance of unabsorbed business loss to be carried forward for A.Y. 2011-11 - As regards the unabsorbed depreciation is concerned, the claim made by the assessee is correct and the Ld. AO is directed to accept the same. Not allowing deduction u/s 115JB of the Act towards unabsorbed depreciation - We find force in the contention of assessee and find that the assessee has rightly claimed deduction of unabsorbed depreciation for the purpose of calculating MAT. Thus Ground No. 3 raised by the assessee is allowed.
|