can we set off unabsorbed dep or current year dep against salary? site any case law if possible
CA vaibhav (no) (111 Points)
26 June 2012can we set off unabsorbed dep or current year dep against salary? site any case law if possible
Prateek Agarwal
(Sr. Executive - Finance & Accounts)
(1732 Points)
Replied 26 June 2012
I am quoting certain case laws for you:-
CIT v. Virmani Industries (P) Ltd.
CIT v. Haryana Hotels Ltd.,
In my view, unabsorbed depreciation can be set-off against any head of income. But, current year depreciation forms part of curretn year Business Income. As we know, business loss cannot be set-off against salary income, hence, current year depreciation cannot be set-off against salary income.
Also, we could take a stand that unabsorbed depreciation of previous years forms part of the current year depreciation and subsequently not getting set-off with salary, but the views of various courts have made it clear that the law has distinguished the provisions of set-off and carry forward of business losses and unabsorbed depreciation losses.
As such, current year depreciation cannot be adjusted whereas unabsorbed depreciation can be adjusted with salary income for an indefinite period.
Hope this helped.
Regards
Prateek
CA Harshit Rastogi
(Chartered Accountant)
(722 Points)
Replied 26 June 2012
Hmm...Agree wid Prateek....
CA vaibhav
(no)
(111 Points)
Replied 26 June 2012
iin v.k singhania it has been stated that set off was allowed upto AY 05-06.. so now it is not allowed...
can anyone refer any case law after AY 05-06
pratik jain
(Article)
(22 Points)
Replied 31 August 2012
firstly to investment kar ke 54F ka examition liya and during resteion period of 3Yr m wo reinvestmnet wala house sale kar deta h to jo examtion usne pahle lithi wo ab tax hogi as a LTCG in currnt yr but Q ye h ki jab wo tax ho rah h us time or bhi STCL h to wo setoff ho payega ki nahi
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