9911796707
|
Home
Issues:
- Assessment of income as income from business or other sources - Allowance of unabsorbed depreciation against income from other sources Analysis: 1. The case involves cross-appeals by the assessee and the revenue regarding the assessment of the assessee's income for the assessment year 1982-83. The assessee, a public limited company, had ceased its business during the previous year, and during the year under consideration, it sold technical drawings, industrial files, and other assets. The main contention was whether the income should be assessed as income from business or other sources, and the allowance of unabsorbed depreciation against income from other sources. 2. The Income Tax Officer (ITO) assessed the income under the head 'other sources' as the business had ceased. The assessee appealed to the CIT (Appeals) claiming the income should be treated as income from business, and the entire expenditure, including depreciation, should be allowed. The CIT (Appeals) upheld the ITO's decision on assessing the income under 'other sources' but allowed the set off of unabsorbed depreciation against the income in question. 3. The Revenue challenged the direction for the set off of unabsorbed depreciation, while the assessee challenged the allowance of only 10% of the total expenditure. The main issue was whether unabsorbed depreciation of an earlier year can be set off against income from other sources when no business was carried out during the year under consideration. 4. The Tribunal referred to various judgments, including those of the Madras High Court, to determine whether unabsorbed depreciation of earlier years can be set off against income from other sources. The Tribunal held that unabsorbed depreciation cannot be set off against income from other sources when no business activity was carried out during the relevant year. 5. The assessee relied on judgments from different High Courts, arguing that unabsorbed depreciation can be set off even if no business was conducted during the year. However, the Tribunal found that these judgments did not support the contention that unabsorbed depreciation of an earlier year can be set off against income under heads other than business. 6. After analyzing the authorities cited, the Tribunal concluded that the Madras judgments were applicable to the case, and the assessee's arguments were not supported by the authorities cited. The Tribunal held that unabsorbed depreciation of earlier years cannot be set off against income from other sources when no business activity was conducted during the relevant year. 7. Ultimately, the Tribunal set aside the CIT (Appeals)'s order and restored the action of the assessing officer, denying the set off of unabsorbed depreciation against the income assessed under the head 'Income from other sources.'
|
