TMI Blog2011 (11) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 2006-07 had business income of ₹ 21,61,463/- which had been set off against brought forward business loss for the assessment year 1998-99 to 2002-03 aggregating to ₹ 51,86,380/- and there was thus net business loss of ₹ 29,48,917/- for the year. There was also unabsorbed brought forward depreciation aggregating to ₹ 19,63,526/- for the assessment year 1998-99 to 2005-06. The assessee had also earned gain of ₹ 1,36,45,567/- from transfer of depreciable assets which had to be assessed as short term capital gain under deeming provisions of section 50. The assessee had set off unabsorbed business loss of ₹ 29,48,917/- and unabsorbed brought forward depreciation of ₹ 19,63,526/- agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed reliance on the decision of the Special Bench of the Tribunal in the case of DCIT vs. Times Guarantee Ltd. (4 ITR (Trib.) 210). 4. We have perused the records and considered the rival contentions carefully. The dispute is regarding set off of brought forward business loss and unabsorbed depreciation against the deemed short term capital gain under section 50 of the IT Act. There is no dispute that brought forward business loss and unabsorbed depreciation can be set off against business income and, therefore, in case the short term capital gain is treated as business income, the claim of the assessee has to be allowed. The real dispute is, therefore, nature of income of deemed short term capital gain under section 50. This issue h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a), relied upon by the ld. DR was on a different issue. The Special Bench in the said case had held that carry forward and set off of unabsorbed depreciation has to be dealt with in terms of provisions applicable to the year to which the unabsorbed depreciation related. Thus in terms of the decision of the Special Bench unabsorbed depreciation for assessment years 1997-98 to 2001-02 could be set off only against business income whereas unabsorbed depreciation for the prior years and subsequent years can be set off against any income. In the present case set off is being considered against business income and, therefore, there is no conflict with the decision of the Special Bench of the Tribunal in the case of Times Guarantee (supra). 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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