2010 (12) TMI 1167

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..... evenue. 3. It was submitted by the learned authorised representative in regard to ground No. 2 which was against the action of the learned CIT(A) in upholding the re-opening of the assessment, that the re-opening was done without any fresh material and consequently was bad in law. 4. In reply, the learned DR submitted that the decision of the Hon'ble Supreme Court in the case of Assistant Commissioner of Income-tax v. Rajesh Jhaveri Stock Brokers P. Ltd. reported in 291 ITR 500 would apply. 5. We have considered the rival submissions. As it is noticed that the assessment in this case was not made and the return was processed only u/s. 143(1) in view of the decision of the Hon'ble Supreme Court referred to supra, the re-open .....

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..... er the head profits and gains of business or profession against the salary income. It was the submission that section 32(2) was in fact only providing for the carry forward of the depreciation. 8. We have considered the rival submissions. A perusal of the decision of the Hon'ble Supreme Court in the case of Virmani Industries P. Ltd., referred to supra, shows that the Hon'ble Supreme Court had drawn a distinction between business loss and unabsorbed depreciation. The limitations are applicable to the carrying forward of business losses and do not apply to the carrying forward of unabsorbed depreciation. Further the Hon'ble Supreme Court had interpreted the meaning of the expression profits or gains chargeable and then wen .....

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..... he business loss is restricted to a period of eight years. As per the provisions of sec. 32 there is no restriction of eight years. This is because the carry forward depreciation is treated as depreciation of the current year. Once this is so, as per the provisions of section 32(2) of the Act this depreciation allowance is liable to be given against any other profits and gains chargeable for that previous year. One should keep in mind that the wordings in sec. 32(2) are profits or gains chargeable for that previous year and not profits and gains of business . In the circumstances, we are of the view that the decision of the Hon'ble Supreme Court in the case of Virmani Industries P. Ltd. does squarely apply even though the provisions .....

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