TMI Blog2014 (2) TMI 1293X X X X Extracts X X X X X X X X Extracts X X X X ..... ff of business losses against the income of capital gains. - Decided in favour of assessee Set off of brought forward unabsorbed depreciation against the short term capital gain - Held that:- This issue is also covered in favour of the assessee by the case of General Motors India Pvt. Limited vs. Dy. CIT [2012 (8) TMI 714 - GUJARAT HIGH COURT ] held any unabsorbed depreciation available to an assessee on 1st day of April 2002 (A.Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001. And once the Circular No.14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from A.Y. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me from sale of plant machinery and building was chargeable to tax as short term capital gain u/s 50 of the Act. On appeal, the ld. CIT(A) upheld the order of the A.O. on this issue relying on the decision of the Mumbai Bench of the Tribunal in the case of Dura Foam Industries Pvt. Ltd. Vs. JCIT (ITA No. 4917 4918/Mum/2008). Aggrieved by the order of the ld. CIT(A), the assessee has preferred this appeal before the Tribunal 2. During the course of appellate proceedings before the Tribunal, the assessee has filed the revised grounds of appeal which read as under:- 1. On the facts and circumstances of the case and law the learned Commissioner of Income Tax-Appeals (CIT-A) erred in upholding the action of the Assessing Officer in n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the Tribunal and the Tribunal allowed the claim of the assessee for set off of brought forward business losses against short term capital gain by holding as under:- Section 72 provides that where for any assessment year, the net result of the computation under the head 'Profits and gains of business or profession' is a loss to the assessee, not being a loss sustained in a speculation business, and such loss cannot be or is not wholly set off against income under any head of income in accordance with the provisions of section 71, so much of the loss as has not been so set off is to be carried forward to the following assessment year and is allowable for being set off 'against the profits, if any, of that business or profe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was, therefore, indeed justified in claiming set off of business losses against the income of capital gains. 4. As the issue involved in the present case as raised in ground No. 1 is similar to the one involved in the case of Digital Electronics Ltd. (supra), we respectfully follow the decision of the co-ordinate Bench of this Tribunal in the said case and direct the A.O. to allow the claim of the assessee for set off of brought forward business losses against the deemed short term capital gain arising from sale of plant machinery and building. Ground No. 1 of the assessee s appeal is accordingly allowed. 5. As regards ground No. 2, it is observed that the issue involved therein relating to the assessee s claim for set of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001. And once the Circular No.14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from A.Y. 1997-98 upto the A.Y. 2001-02 got carried forward to the assessment year 2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act, 2001 and were available for carry forward and set off against the profits and gains of subsequent years, without any limit whatsoever. Respectfully following the decision of the Hon ble Gujarat High Court in the case of General Motors India Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
