An assessee is entitled to seek adjustment of unabsorbed depreciation against any amount of undisclosed income noticed in search

IT: Where aggregate losses were huge, in which undisclosed income would submerge and would virtually lose its identity, there was nothing to be brought under tax regime of Chapter XIV-B
IT: An assessee is entitled to seek adjustment of unabsorbed depreciation against any amount of undisclosed income noticed in search
■■■
[2014] 52 taxmann.com 479 (Andhra Pradesh and Telangana)
HIGH COURT OF TELANGANA & ANDHRA PRADESH
Fenoplast Ltd.
v.
Assistant Commissioner of Income-tax*
L. NARASIMHA REDDY AND CHALLA KODANDA RAM, JJ.
IT TRIBUNAL APPEAL NO. 61 OF 2000†
JULY  11, 2014
Section 158BB, read with sections 2(24) and 158BH, of the Income-tax Act, 1961 - Block assessment in search cases - Undisclosed income, computation of (Adjustment of accumulated losses) - Assessment years 1987-88 to 1997-98 - Whether what becomes taxable under chapter XIV-B is income and if undisclosed income has effect only of reducing loss, it is difficult to treat any component thereof as income - Held, yes - Whether where aggregate losses were huge, in which undisclosed income would submerge and virtually lose its identity, there was nothing to be brought under tax regime of Chapter XIV-B - Held, yes [Para 18] [In favour of assessee]
Section 158BB, read with section 32, of the Income-tax Act, 1961 - Block assessment in search cases - Undisclosed income, computation of (Adjustment of depreciation) - Assessment years 1987-88 to 1997-98 - Whether undisclosed income ought to be treated as part of total income and subjected to same assessment in context of deductions and allowance as in case of ordinary assessments - Held, yes - Whether, therefore, an assessee is entitled to seek adjustment of unabsorbed depreciation against any amount of undisclosed income noticed in search - Held, yes [Para 23] [In favour assessee]