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TMI Blog2021 (9) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 2009-10. 2.The appeal was admitted on 02.01.2018, on the following substantial question of law:- "Whether unabsorbed depreciation could be set off against capital gains in any Assessment Year prior to 2001-2002?" 3.Heard Ms.R.Hemalatha, learned Senior Standing Counsel for the appellant/Revenue and Mr.Venkata Narayanan, learned counsel for the respondent/assessee. 4.It is not in dispute that the substantial question of law framed for consideration has been answered against the Revenue in the case of CIT Vs. Best & Crompton Engineering Ltd., [T.C.A.No.844 of 2014, dated 02.08.2021]. The relevant paragraphs of the judgment read as follows:- "4.On going through the facts and circumstances, we find that the substantial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng provisions of sub-section (2) of section 32 of the Income-tax Act, carried forward unabsorbed depreciation is allowed to be set-off against profits and gains of business or profession of the subsequent year, subject to the condition that the business or profession for which depreciation allowance was originally computed continued to be carried on in that year. A similar condition in section 72 for the purpose of carry forward and set-off of unabsorbed business loss was removed last year. 22.2 With a view to harmonise the provisions relating carry forward and set-off of unabsorbed depreciation and unabsorbed loss, the Act has dispensed with the condition of continuance of same business for the purpose of carry forward and set-off of una ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total depreciation comprising of the depreciation of the relevant assessment year along with the unabsorbed depreciation of the earlier years becomes the total current year's depreciation which is allowed to be set off against income under any head of income including long term capital gain. Accordingly, we find no reason to interfere with the order of CIT(A) qua this issue and the same is hereby upheld. We also hold that as per provisions of section 72 of the Act, the unabsorbed business loss (other than speculative loss) of earlier years shall be allowed to be set-off only against the profits and gains from business carried on by the assessee of the current year and so on. We order accordingly. However, our above decision with respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iation for such succeeding year and is deemed as part thereof. If, however, there is no current depreciation for such succeeding year, the unabsorbed depreciation becomes the depreciation allowance for such succeeding year. We are of the considered opinion that any unabsorbed depreciation available to an assessee on 1st April, 2002 (asst. yr. 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 asst. yr. 1997-98 up to the asst. yr. 2001- 02 got carried forward to the asst. yr. 2002-03 and bec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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