Case Law Details
Asst. Vs Sai Bhaskar Irons Ltd.
Once addition under section 68 was included in gross total income, AO had to allow set off of unabsorbed depreciation loss as provided under section 71 dealing with the set off of loss from one head against income from another head.
FULL TEXT OF THE ITAT JUDGMENT
This appeal is filed by the revenue against the order of the Commissioner of Income-Tax (Appeals) [CIT(A)]-1, Guntur vide ITA No.65/CIT(A)-1/GNT/2015-16 dated 30.12.2015 for the assessment year 2012-13.
2. All the grounds of appeal are related to the set off of carried forward depreciation against the addition made u/s 68 of IT Act. In this case, the assessee filed return of income declaring total income of Rs.Nil after adjusting brought forward losses. The case was selected for scrutiny and the Assessing Officer (AO) made the addition of Rs.3,99,00,000/- u/s 68 of the I.T. Act as unproved cash credits determining gross total income of Rs.6,42,31,119/-. From the gross total income, the AO allowed the set off of unabsorbed brought forward business loss of Rs.1,99,59,152/- and set off of depreciation amounting to Rs.43,71,967/-and assessed the income at Rs.3.99 crores. The AO did not allow the unabsorbed brought forward depreciation loss from the income assessed. Aggrieved by the order of the AO the assessee went on appeal before the CIT(A) and the Ld.CIT(A) allowed the appeal of the assessee holding that the income required to be assessed under the head ‘income from other sources’ and once it is treated as part of gross total income, the unabsorbed carried forward depreciation has to be allowed as set off from such total income. For ready reference, we extract the relevant paragraph of Ld.CIT(A)’s order which reads as under:
Please become a Premium member. If you are already a Premium member, login here to access the full content.
