TMI Blog2016 (12) TMI 1477X X X X Extracts X X X X X X X X Extracts X X X X ..... nue's plea, there by confirming the order of Tribunal Allow the claim of the assessee of adjusting the Brought Forward Unabsorbed Depreciation Loss against current year’s income and accordingly, allow the appeal of the Assessee. - ITA No. 4032 & 4033/Del/2016 - - - Dated:- 25-10-2016 - SHRI H.S. SIDHU, JUDICIAL MEMBER For The Assessee : Sh. Ramesh Goyal, CA For The Department : Sh. F.R. Meena, Sr. DR ORDER These appeals by the Assessee are directed against the common order of the Ld. Commissioner of Income Tax (Appeals)-I, Noida dated 30.5.2016 pertaining to assessment years 2012-13 2014-15 respectively. Since the issues involved in these appeals are common, hence, the appeals were heard together and therefore, are being disposed of by this common order for the sake of convenience, by dealing with ITA No. 4032/Del/2016 (AY 2012-13). 2. The following are the common grounds of appeal in both the appeals which read as under:- 1. That on the facts and circumstances of the case, the order passed by the AO is bad both in law and on facts of the case. 2. That on the facts and circumstances of the case, the AO has erred in not adjusting brought forward u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income other than from the head Business and Profession. The facts of the case are not in dispute. The appellant has no business activities during the year and has income from House Property only. The provisions of section 71 provide for setting off of losses from one head against income from another and the setting off of loss under one head of income is permitted against another head but during the same year. The brought forward losses whether on account of unabsorbed depreciation or business loss from earlier years are to be set off only against income from business and not against other heads of income. Admittedly, in this case the brought forward unabsorbed depreciation has been set off against the House Property income. The same is not admissible in law. The Ld. AO has therefore correctly disallowed the claim of the appellant. There is no infirmity in the impugned assessment orders the same are therefore confirmed. The appeals of the appellant fails and is dismissed. 5. Against the aforesaid order of the Ld. CIT(A), the Assessee is in appeal before the Tribunal. 6. Ld. Counsel of the assessee has filed a Paper Book containing pages 1 to 45 having the written submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income. We find that on the issue of set off of unabsorbed depreciation there are number of decisions of Hon ble Supreme Court, Hon ble High Court and the ITAT in which unabsorbed depreciation has been adjusted against income from house property or income from other sources. i) CIT vs. Spel Semi Conductors Ltd. (2012), 27 Taxmann.com 242 (Mad.) 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 make it clear that if the unabsorbed depreciation allowance could not be wholly ,set off under clause (i) and clause (ii), the amount of depreciation not so set off can be set off from income from other head, if any, available for that assessment year. The language of Section 32(2) is very clear and there is hardly anything contained in Section 72(2) to prevent su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uip (P.) Ltd., [2002] 123 Taxman 820 (Gujarat) 4. A far as the first question is concerned, our attention is invited to the decision of this Court in Deepak Textile Industries Ltd.'s case (supra) and the decision of the Apex Court in CIT v.Virmani Industries (P.) Ltd. [1995] 216 ITR 6071. In the aforesaid decisions, the Courts have taken the view that in order to avail of the benefit under section 32(2) of the Act, it is not necessary that the business carried on in the following previous year should be the same business as was carried on in the preceding previous year. In the absence of any words to that effect, no such requirement ought to be read into the said sub-section. Contrasting the provisions of section 32(2) with the provisions of section 72(1), the Courts have further held that in the following year, the assessee need not carryon any business or profession for availing of the benefit of sub-section (2) of section 32. iv.) JCIT V s India Stems hip Co. Ltd., [2003] 129 Taxman 158 (MAG), Kolkatta 9. We have heard the rival submissions and gone through the record. We have noticed that the AO did not give weightage to the clarification issued by the Fina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f CIT v. Premchand Jute Mills Ltd. [1986] 56 CTR (Cal.) 225/[1987] 164 ITR 288 (Cal.) has observed that the assessee was held entitled to set off the unabsorbed depreciation pertaining to the assets of the business carried out in earlier years against income from letting out such assets even though such income was assessable as income from other sources. We have further observed that the Hon'ble Supreme Court in the case of UCO Bank v. CIT[1999] 154 CTR 88/237 ITR 889 (SC) has held that the CBDT has power, inter alia, to tone down the rigor of the law and ensure a fair enforcement of a provision by issuing circulars from time to time. The power has been conferred to the CBDT by section 119 of the IT Act, 1961. It has further been noticed by us that the circular number categorically explains the amendment to section 32(2) which is in consonance with the line of argument canvassed by the assessee in the instant case. In view of the above, we are of the considered opinion that there is no infirmity in the order of the learned CIT(A) who has rightly directed the AO to revise the computation of income of the assessee giving an appropriate benefit in this regard. 5. ITO V s Graha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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