The Tax Publishers2020 TaxPub(DT) 2359 (Mum-Trib)

INCOME TAX ACT, 1961

Section 32(2) Section 72(2)

A bare perusal of sub-section (2) of section 72 would show that before giving effect to provisions of section 32(2) dealing with carry forward of unabsorbed depreciation, precedence is given to set off of brought forward business losses against income under the head 'Profits and Gains from Business or Profession'. Accordingly, AO was directed to first set off brought forward business losses of earlier years before set-off of unabsorbed depreciation of earlier year.

Depreciation - Unabsorbed depreciation - Setting off of unabsorbed depreciation against business income and income from other sources - Before setting off of brought forard business losses of preceding year

AO allowed setting off of unabsorbed depreciation against business income and income from other sources for the concerned year before setting off of brought forard business losses of preceding year. Assessee challenged this.Held: A bare perusal of sub-section (2) of section 72 would show that before giving effect to provisions of section 32(2) dealing with carry forward of unabsorbed depreciation, precedence is given to set off of brought forward business losses against income under the head Profits and Gains from Business or Profession. Accordingly, AO was directed to first set off brought forward business losses of earlier years before set off of unabsorbed depreciation of earlier year.

Followed:CIT v. Hindustan Unilever Ltd. (2016) 394 ITR 73 (Bom) : 2016 TaxPub(DT) 3997 (Bom-HC) and General Motors India Pvt. Ltd. v. Dy.CIT (2013) 354 ITR 244 (Guj) : 2013 TaxPub(DT) 624 (Guj-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12 & 2012-13

INCOME TAX ACT, 1961

Section 92B

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