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TMI Blog2014 (12) TMI 1011X X X X Extracts X X X X X X X X Extracts X X X X ..... ct must be given to Section 32(2) of the Act for that assessment year - thus, the order of the CIT(A) is set aside and the AO is directed to give appropriate relief to the assessee by allowing set off of unabsorbed depreciation of the AY 2003-04 and 2004-05 against the rental income assessed to tax in the years – Decided in favour of assessee. - ITA No.1309/Hyd/14, ITA No.1310/Hyd/14, ITA No.1311/Hyd/14, ITA No.1723/Hyd/14 - - - Dated:- 26-11-2014 - Shri P. M. Jagtap And Shri Saktijit Dey,JJ. For the Appellant : Shri V. Raghavendra Rao For the Respondent : Shri Rajat Mitra DR ORDER Per P. M. Jagtap, Accountant Member : These four appeals filed by the assessee against four separate orders of the learned Commissioner of Incometax( Appeals) V, Hyderabad for assessment years 2006-07, 2008- 09 and 2009-10 all dated 31.3.2014 and for assessment year 2007- 08 dated 16.9.2013, involve a common issue and the same, therefore, have been heard together and are being disposed of by a single consolidated order for the sake of convenience. 2. The solitary common issue involved in all these four appeals relate to the assessee s claim for set off of unabsorbed depre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the outset, relied on the relevant provisions of S.57(ii) of the Act in support of the assessee s claim for set off of unabsorbed depreciation pertaining to assessment years 2003-04 and 2004-05 against the income from lease rents assessed to tax under the head income from other sources in all the four years under consideration. He has also cited the following case law and submitted that a similar issue has been decided in favour of the assessee in all these cases- (a) CIT V/s. Premchand Jute Mills Ltd. (164 ITR 288)-Cal. (b) DCIT V/s. Akay Flavours Aromatics Pvt. Ltd. (2011) 130 ITD 41(Coch.)(TM) (c) Judgment of the Hon ble Madras High Court dated 15/09/2012 in CIT V/s. Spel Semi Conductor Limited. 6. The learned Departmental Representative, on the other hand, has strongly relied on the orders of the authorities below in support of the Revenue s case on the issue involved in these appeals, and also submitted that a similar issue has already been decided by the Tribunal against the assessee, vide para 27 of the order dated 30.12.2010 passed in ITA No.288/Hyd/2009 and CO No.8/Hyd/2009 for the assessment year 2005-06, which is reproduced below 27. We have carefu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the assessment years 1907-71 and 1971-2, it was not disputed that in the earlier years depreciation was suffered by the assets involved, namely, the jute mill, and that such depreciation remained unabsorbed. The assessee was entitled to carry forward the said unabsorbed depreciation under section 32(2) without any reference to section 57. In the assessment years involved the assessee earned income from letting out machinery and plant which was not chargeable to tax under the head profits and gains of business or profession but to as chargeable under the head Income from other sources . From such income the assessee was entitled to deduction in respect of expenditure and depreciation in accordance with section 32(2). The specific mention of section 32(2) in section 57 permits deduction of the unabsorbed carry forward depreciation of earlier years from the income received form plant, machineries or furniture let out. There is no bar or limitation in section 57(ii). 8. It is also observed that Hon'ble Madras High Court has decided a similar issue in favour of the assessee in the case of CIT V/s. Spel Semi Conductor limited (supra), after considering the relevant provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on two decisions, one by the Hon'ble Supreme Court in the case of Mother India Refrigeration Industries (P) Ltd. (supra) and that of the Hon'ble Bombay High Court in Ravi Industries Ltd. s case (supra). I find that in these cases before the Hon'ble Courts the issue of set off of unabsorbed depreciation with income under any other head apart from income under the head Income from Business has been considered with reference to section 10(2)(vi) proviso (b) of the Indian Income-tax Act, 1922. The provisions of Income-tax Act, 1961 relating to the set off of unabsorbed depreciation is pari material with the corresponding provisions of law under the old Act, 1922 the ratio of the decision of the Hon'ble Courts cited supra would be applicable to the issue before the Tribunal. A combined reading of the relevant provisions of law and the applicable decisions of the Hon'ble courts, I have no hesitation to hold that the unabsorbed depreciation would be set off with business income or under any other head of income including income from other sources and accordingly, the question referred to him is answered in favour of the assessee and against the revenue. In this v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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