TMI Blog2016 (4) TMI 1394X X X X Extracts X X X X X X X X Extracts X X X X ..... me u/s.69 of the Act or not, which is totally different issue. Section 72 of the Act does not permit set off of accumulated losses and unabsorbed depreciation against any other head of income other than the income from profits and gains of business or profession . Being so, the above order of the Tribunal has no application to the facts of the present case. Once unabsorbed depreciation is considered as part of current depreciation, no doubt, the net result of computation under the head 'Profits and gains of business or profession' for any given year would be inclusive of such unabsorbed depreciation. Needless to say that any loss as a result of such computation whether on account of unabsorbed depreciation or not would not be su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctional High Court s decision in the case of S.Muthukumars Stanely Rajan Vs. ITO cited in [2014] 42 taxmann.com 439(Mad.), wherein it was held that when unexplained cash credit had been added to income, contention of assessee that necessary expenditure should be deducted and profit alone could be taken as income could not be accepted. 3. The facts of the case are that the assessee in this case wants to set off of income offered u/s.68 of the Act against the loss incurred by the assessee. The AO had not allowed the set off of the income offered u/s.68 of the Act against the loss incurred in all the regular heads of income specified in Section 14 of the Act. the AO allowed only set off of brought forward unabsorbed depreciation to the exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Apex Court and hence, it is not necessary to repeat the same. Suffice it to state that the Act does not envisage taxing any income under any head not specified in section 14 of the Act. In the circumstances, there is no question of tying to read any conflict in the two judgements of this court as submitted by the learned Counsel for the Revenue . Hence, the Ld.CIT(A) directed the AO to allow set off of carried forward depreciation loss in accordance with section 72 section 32 of the Act for assessment year 2006-07. Against this the Revenue is in appeal before us. 4. None appeared for the assessee. We have heard the argument of the ld.D.R and perused the material on record. In our opinion, the similar issue was came for consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32(2) would show that s. 71 deals with inter-head adjustments within a given year. Sec. 72 provides for carry forward and set off of loss, whereas s. 32(2) deals with carry forward of unabsorbed depreciation. The last of these above referred sections clearly mentions that unabsorbed depreciation has to be added to the depreciation allowance of the subsequent year and to be considered as part of the current depreciation. This position is clear from the decision of the Hon'ble apex Court in the case of Virmani Industries (supra). Of course, the order of the Hon'ble apex Court does bring out the difference between unabsorbed loss and unabsorbed depreciation. Nevertheless unabsorbed depreciation was never considered as something that w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether on account of unabsorbed depreciation or not would not be susceptible to a set off against income under the head salaries on account of specific Bar contained in sub-s. (2A) of s. 71 of the Act. Neither s. 72 nor s. 32(2) of the Act would in any way affect the inter-head adjustments specified under s. 71 of the Act nor the application of specific bar contained in sub-s. (2A) thereof. This being the case, we are of the opinion that the AO as well as the learned CIT(A) was well justified in not allowing the claim of the assessee for having its unabsorbed depreciation from earlier years to be set off against salary income. Accordingly, we are of the opinion that the CIT(A) is justified in disallowing set off of unabsorbed depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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