Law:

Section:

Section 32 of the Income-tax Act, 1961 - Depreciation - Unabsorbed depreciation - Assessment year 1962-63 - Whether benefit of unabsorbed depreciation can be availed of by an assessee in any subsequent year without satisfying precondition attached to section 32(1) and it is not necessary for assessee to show that in such subsequent year assessee actually carried on business and asset in question was used for purpose of such business - Held, yes - Whether unabsorbed depreciation can be carried forward and set off even against profits under heads other than business - Held, yes FACTS The assessee-company was carrying on business in the manufacture of bobbins, etc. It stopped doing that business with effect from the previous year relevant to the assessment year 1955-56 though it continued to own the plant, machinery, etc. Thereafter, the assessee continued to be assessed only in respect of income from property which it owned and possessed. During the assessment year 1962-63, the assessee received a refund of Rs. 6,982 from the Electric Department out of electricity charges already paid by it in the above years when it was carrying on the business aforesaid. The electricity charges to which the refund related had been allowed to the assessee as an expenditure of the business in the preceding assessments. The ITO taxed the aforesaid amount as the business income of the assessee in view of the provisions of section 41(1) . The assessee claimed that this refund was liable to be adjusted against the unabsorbed depreciation for the years 1951-52 to 1954-55. The Tribunal held that unabsorbed depreciation could be carried forward, under the provisions of section 32(2) even if the business had ceased to exist and the plant and machinery were not used for the purposes of business. On reference : HELD Normal depreciation in respect of buildings, machinery, plant or furniture owned by an assessee is allowable for any particular year under section 32(1) which postulates the satisfaction of two preconditions, namely, (i) that the business or profession must have been carried on in that year and (ii) that such building, machinery, plant or furniture has been "used" for the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492