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TMI Blog2002 (7) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... 61, the Income-tax Officer brought to tax income from house property on notional basis in respect of certain properties transferred to Elscope (P.) Ltd. Further, he did not allow the assessee's claim for carry for ward and set off of unabsorbed depreciation, development rebate and investment allowance of the earlier years on the ground that the assessee had ceased to carry on business during the year under reference. The Income-tax Officer had also charged interest under section 215 of the Act. In appeal, following his order dated February 29, 1984, in the case of Sarabhai Chemicals (P.) Ltd., the Commissioner of Income-tax (Appeals) held that the house property income cannot be brought to tax on notional basis. He, however, upheld the act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opinion of this court. The questions are as under: At the instance of the Revenue: "(1) Whether, on the facts and in the circumstances of the case, the asses see was entitled to carry forward and set off of unabsorbed depreciation? (2) Whether, on the facts and in the circumstances of the case, interest could have been charged under section 215 of the Income-tax Act, 1961? (3) Whether, on the facts and in the circumstances of the case, the deletion of Rs. 76,648 on account of house property income was justified?" At the instance of the assessee: "(4) Whether, on the facts and in the circumstances of the case, the asses see was entitled to carry forward and set off of unabsorbed development rebate and investment allowance?" As far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 ITR 279 and in Sarabhai Chemicals P. Ltd. v. CIT [2002] 257 ITR 355. In the aforesaid decisions, this court has followed the principle laid down by the apex court and has accordingly laid down the principle on construction of the provisions of section 215 of the Income-tax Act, 1961, that interest becomes payable by the assessee under section 215 as a result of operation of law and it is not made dependent upon the discretion of the Income-tax Officer. The discretion which is conferred upon the Income-tax Officer is not in respect of determination of payability of interest but in respect of reduction or waiver of interest payable by the assessee. While deciding whether interest under section 215 of the Act is payable by the assessee or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income from property in his own right. In view of the above, the Tribunal was justified in upholding the deletion of Rs. 76,648 on account of house property income. Accordingly, our answer to question No. (3) is in the affirmative, i.e., in favour of the assessee and against the Revenue. Coming to the last question about carry forward and set off of unabsorbed development rebate and investment allowance, in view of the clear statutory provisions of sub-section (5) of section 32A and also of sub-section (4)(a) and sub-section (5) of section 155 of the Income-tax Act, as explained by the decision of this court in Kalindi Investment P. Ltd. v. CIT [1995] 213 ITR 207 and in view of the fact that the unit was transferred within eight years fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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