To avail Section 32(2) depreciation claim it’s not necessary that business carried on in following previous year

The Serendipity Apparels Pvt. Ltd. Vs. CIT (ITAT pune))– The assessee has derived its lease rental income under the head from other sources. There is no dispute that the same is covered u/s.56(2)(iii) of the Act. This is followed by Section 57 stipulating allowability of corresponding depreciation relief u/s.32(1) & (2) of the Act. The CIT holds that the assessee’s business as it existed earlier of manufacturing is no longer in existence or the same is not being carried out in the impugned assessment year so as to claim depreciation relief u/s.32(1) & (2) of the Act. We notice from case law of Fabriquik (supra) that their lordships consider earlier decisions of (1987) 168 ITR 773 CIT vs. Deepak Textile Industries Ltd. (Gujarat) and (1995) 216 ITR 607 (Gujarat) CIT vs. Virmani Industries Pvt. Ltd. holding that in order to avail Section 32(2) depreciation claim, it is not necessary that the business carried on in the following previous  year should be the same as it was carried on the preceding previous year. And also that there are no words to that effect in the relevant statutory provision as well. The jurisdictional high court is of the view that an assessee need not carry on any business or profession for availing this benefit in the following year. The Revenue fails to point out any exception thereto. We accordingly accept assessee’s latter two arguments on merits and hold it entitled for the impugned depreciation benefit.

IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD “D” BENCH AHMEDABAD
BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER,
AND SHRI S. S. GODARA, JUDICIAL MEMBER.
ITA. No. 1244/Ahd/2014-(Assessment Year:2009-10)
The Serendipity Apparels Pvt. Ltd. Vs. CIT
By Assessee : Shri S. N. Soparkar with Urvashi Shodhan, A.R.
By Revenue : Shri Sanjay Agrawal, CIT D.R.
Date of Hearing : 28.08.2015
Date of Pronouncement : 21.10.2015

ORDER

PER S. S. GODARA, JUDICIAL MEMBER This assessee’s appeal for assessment year 2009-10, arises from order of the CIT – IV, Ahmedabad, dated 24.03.2014 passed in proceedings u/s.263 of the Income Tax Act, 1961, hereafter ‘the Act’.

2. This appeal raises the following grounds: