Dipjyoti Majumdar (CA in service & CS. dipmaj@ rediffmail.com ) (3468 Points)
08 May 2014Friends,
Please advise what is the amount of unabsorbed depreciation and/or unabsorbed business loss from the enclosed computation of total income and determination of tax liability. The segregation, as you know, is important as unabsorbed depreciation can be carried forward for more than 8 years while business loss cannot.
Regards,
Rajagopalakrishnan R
(PARTNER)
(1422 Points)
Replied 08 May 2014
A very interesting Poser!!
Combines thr effect of Sections 32(2), 71 and 72.
Since 71 ( set off between heads of income within the same year does not make a difference between unabsorbed depreciation and loss, the bifurcation must be done after such inter head set off. in this case after the such set off, the entire loss that remains unabsorbed consists of the depreciation allowance only ( Depreciation under the IT Act being more than the residual loss). Therefore the entire amount is to be deemed as unabsorbed depreciation allownace and can be carried forward and set off without limitation of 8 years!
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