Commissioner of Income Tax vs Rajratna Naranbhai Mills Co. Ltd.

G.T. Nanavati, J.—In both these references, the point which arises for consideration is the same and the assessee is also the same. Though

the question is the same, it pertains to five assessment years, viz., assessment years 1972-73, 1973-74, 1974-75, 1975-76 and 1976-77. The

question which arises for consideration is, whether the assessee was entitled to claim a set off of unabsorbed depreciation allowance carried

forward from the assessment year 1967-68 against income under the head ""Income from other sources"", in the aforesaid assessment years even

though the assessee had gone into liquidation and as it was not doing business or earning income.

The Income Tax Officer rejected the claim of the assessee on the ground that there was no business income against which carried forward

unabsorbed depreciation allowance can be set off.

The assessee also lost in the appeals which it had filed before the Appellate Assistant Commissioner. But the Tribunal allowed the appeals filed

by the assessee and, therefore, at the instance of the Revenue, the Tribunal has made these references.

The facts are not in controversy and as the point which arises for consideration in these two references is covered by the decision of this court,

they are not required to be stated. This court in Commissioner of Income Tax Vs. Deepak Textile Industries Ltd., and Anant Mills Ltd. Vs.

Commissioner of Income Tax, has held that the unabsorbed depreciation could be set off in the subsequent years against the income under the

head ""Other sources"" notwithstanding the fact that the business in respect of which it arose ceased to exist in the year of such set off. Following

those two decisions, our reply to the question referred to us is that the assessee was entitled to claim set off of unabsorbed depreciation allowance

carried forward from the assessment year 1967-68 against the income under the head ""Income from other sources"". No order as to costs.