TMI Blog2012 (12) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that as far as the income from other sources are concerned, there could be no set off of business loss or carried forward loss. Section 72(2) is as regards set off of business loss as against the income from profits and gains of business or profession and if there is loss as well as unabsorbed depreciation, the set off shall be first on the business loss as against the business income and then on unabsorbed depreciation. What is spoken to under Section 32(2) is as regards set off of unabsorbed depreciation as per clause (ii) of sub section (1) and when the unabsorbed depreciation could not be set off as against the income from business or profession by reason of there being no income available under the said heads and where there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the loss brought forward from 1995-96 and 1996-97 to Rs. 1,36,60,836/- and Rs.11,24,919/- respectively on the business income of Rs.1,47,85,755/- and arrived at the business income as 'Nil'. It is a matter of record that after adjusting carried forward loss, there was still more amount available by way of carried forward loss. It is also seen from the assessment order that the assessee had income from other sources to the tune of Rs.10,03,533/-. The assessee sought for adjustment of carried forward of unabsorbed depreciation in the income from other sources. The claim of the assessee was negatived by the Officer. Aggrieved by the same, the assessee went on appeal before the Commissioner of Income Tax (Appeals), who rejected the assessee's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed depreciation allowance cannot be wholly set off under clause (i) the amount not so set off shall be set off from the income under any other head, if any, assessable for that assessment year; (iii) if the unabsorbed depreciation allowance cannot be wholly set off under clause (i) and clause (ii), the amount of allowance not so set off shall be carried forward to the following assessment year and - (a) it shall be set off against the profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year; (b) if the unabsorbed depreciation allowance cannot be wholly so set off, the amount of unabsorbed depreciation allowance not so set off shall be carried forward to the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carried forward for the next year. However, given the fact that the assessee has income under the other heads, Section 32(2) provides the relief. 6. Thus, as far as the income from other sources are concerned, given the fact that under Section 32(2) of the Act, there is a provision of set off of unabsorbed depreciation allowance as against the income from other sources, it is not necessary that one should wait for the assessee to earn income from business so as to exhaust the carried forward loss to be set off as against the business income and then apply the unabsorbed depreciation. A reading of Section 32(2) thus makes it clear that if the unabsorbed depreciation allowance could not be wholly set off under clause (i) and clause (ii), th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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