TMI Blog2018 (10) TMI 1264X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, the waiver of the interest amount was not offered for taxation. - No additions. Disallowing set-off of unabsorbed depreciation against income of long Term Capital Gain - belated filing of returns of income - Held that:- In this respect our attention was drawn to the decision of the Appellate Tribunal, Mumbai Bench,in the case of ACIT vs. Anil Printers Ltd. [2016 (4) TMI 907 - ITAT MUMBAI] wherein the Tribunal held that the condition of filing return of income within the time prescribed u/s.139(1) of the Act is not applicable for the provisions of sec.32(2) and therefore, carry forward and set off of the unabsorbed depreciation can be allowed even though the returns of those respective years were not filed within the time prescribed u/s. 139(1) of the Act. Thus we hold that brought forward unabsorbed depreciation be allowed for set off against Long Term Capital Gains and we direct accordingly. - Assessee appeal allowed. - I.T.A. No. 801/Mum/2016 - - - Dated:- 10-10-2018 - Sh. Sandeep Gosain, JM And Sh. N. K. Pradahan, AM For the Appellant : Shri B. V. Jhaveri AR For the Respondent : Shri Rajora Satish C. Ramsevak, and Shri Ram Tiwari, DR ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT(A) and Ld. CIT(A) after considering the case of both the parties, dismissed the appeal of the assessee. Aggrieved by the order of Ld. CIT(A), assessee has preferred the present appeal by raising the above grounds. Ground No. 1. 4. This ground raised by the assessee elates to challenging the order of Ld. CIT(A) indisallowing set-off of Short Term Capital Loss of ₹ 685, 490/- against Long Term Capital Gain. 5. We have heard counsels for both the parties at length and we have also perused the material placed on record as well as the orders passed by revenue authorities. Before we decide the merits of the case, it is necessary to evaluate the orders passed by Ld. CIT(A). The Ld. CIT(A) has dealt with the above grounds raised by the assessee in para no. 4 of its order. The operative portion is contained in para no. 4.4 to 4.5 of its order and the same is reproduced below:- 4.4 I have carefully considered facts of the case, findings of the AO in assessment order, submissions of the Ld AR and material placed on record. On going through the facts of the case, it is seen that during the year, the appellant has sold plot no 115 (which was purchased on 30.11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / proof for disposal of assets, the contention of the appellant is not acceptable, therefore rejected and disallowance of ₹ 6,85,490/-, made by the AO, is upheld. This ground of appeal is dismissed. After having gone through the orders passed by revenue authorities and after hearing the arguments for both the parties at length, we find that the initially the assessee company was carrying on the business of maintenance and servicing of all types of electrical and mechanical equipments from its factory premises situated at Kavle Industrial Estate, Village Isambe, Tal. Khalapur, Dist. Raigad. The business of the assessee company had been discontinued since A.Y. 2004-05, therefore, the assessee sold the plot of land on which factory building was situated, which had resulted into Long-term Capital Gains of ₹ 54,43,696/-. As per the submission of the assessee, the assessee company had sold the land along with the factory building situated thereon and written off the factory building having WDV of ₹ 5,69,888/-, electrical installation having WDV of ₹ 95,998/ ,- tools and equipment having WDV of ₹ 9,732 and furniture having WDV ₹ 10,372/-, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no other amount has been received by the assessee and the factory building which was constructed on the said land alongwith electrical installation, equipment, furniture, etc. were also sold along with land for the total lumpsum consideration of ₹ 60 lakhs which includes script value of the building. Whereas the claim of the assessee was rejected on the ground that the sale deed does not talk about sales of above assets alongwith plot of land and hence the claim is not verifiable. On the contrary, sale deed contains the recital that the factory building which was constructed on the said land alongwith electrical installation, equipment, furniture, etc were also sold alongwith the land for a total lumpsum consideration of ₹ 60 lakhs including script value of the building. Therefore, while taking into consideration the facts of the present case and after appreciating the documents, more particularly the registered convenience of deed, we are of the considered view that the lumpsum sale consideration of ₹ 60 lakhs includes value of land and electrical installation, equipment, building, furniture, etc. Therefore, in these circumstances, the AO is directed to adjust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st amendment (i.e. the law applicable for the year under consideration) the set off is available from profits or gains chargeable for the previous year. The claim of the lower authorities that profits or gains so mentioned should be restricted to profits or gains of business or profession cannot be accepted because had that been the intention of the legislature it would not have deleted phrase of any business or profession in the post amended provisions of Sec. 32(2). The law regarding set off of unabsorbed depreciation upto 1.4.1996 was very liberal and set off was allowable against any income. This was also upheld by the Hon'ble Supreme Court in the case of Virmani Indus. (P.) Ltd. (216 ITR 607). However, the law regarding such set off was changed by the Finance Act No. 2 of 1996 and from A.Y. 1997-98 to 2002-03 the unabsorbed depreciation was put at par with business losses u/s. 72. However the status quo have been restored from A.Y. 2003-04 and therefore the ratio laid down by the Hon'ble Supreme Court in the case of Virinani Indus. (P.) Ltd. (supra) once again hold good and so now unabsorbed depreciation can be set off against any income. Thus, the claim of curre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was invited to page 74 which is Notes to the audited accounts for A.Y. 2001-02 which reads as under: Depreciation of fixed assets is provided on Straight Line method at the rates prescribed under Schedule XIV of the Companies Act, 1956. The method of providing depreciation has been changed from Written Down Value Method to Straight Line Method. The loss for the year is reduced to the extent of depreciation written back of ₹ 9,89,033/-. It was submitted that the aforesaid is the accounting entry writing back the depreciation and therefore, it has no relevance to carry forward and set off of the unabsorbed depreciation of the earlier years in the year under consideration. After having gone through the facts of the In respect of waiver of loan, the assessee company had taken loan of about ₹ 58,00,000/- from C.K.P. Co-op. Bank Ltd. in theyear 1996-97. As per the assessee, it could not repay the loan and interest thereon due to loss, therefore the assessee had applied for one-time settlement to the bank whereby the principal amount of the loan was repaid and the interest on the loan amount was waived. The said interest though provided in the books was not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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