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2006 (7) TMI 291 - AT - Income TaxUnabsorbed Depreciation - whether it is possible to set off the brought forward depreciation loss against capital gains - HELD THAT:- In the present case before us the assessment year 1999-2000, as mentioned earlier, and the depreciation allowance is for the assessment year 1997-98 which the assessee is claiming for set off against the income for the present assessment year. As explained in the earlier paragraph in the table giving comparative position before the amendment and after the amendment it is absolutely clear that it is only section 32(2)(iii) of the Act, that is operational in the case of the assessee. On that basis all that the assessee could claim is for carry forward of the unabsorbed depreciation for six more successive assessment years to be adjusted against the income from profits and gains from the same business from which the depreciation claim arose and the assessee would be entitled to carry this act for the next six assessment years. Further, the clear condition that is laid down in this section is that in the assessment year in which the assessee is claiming the set off of the unabsorbed depreciation, the assessee must be carrying on that business and the income from that business must exist. To put it in other words, if the business from which the depreciation claim arose is not carried out in any of the assessment years, the assessee would not be entitled to the set off. Thus, we decide the question in the negative, i.e., in favour of the revenue. The appeal is dismissed. No costs.
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