COMMISSIONER OF INCOME TAX, CALCUTTA vs JAIPURIA CHINA CLAY MINES (P) LTD.

The Supreme Court held that under Section 10(2)(vi) and Section 24(1) of the Income Tax Act, 1922, unabsorbed depreciation from previous years can be set off against income from sources other than business, including dividend income. The Court found that the Income Tax Officer's refusal to allow this set-off was incorrect, as depreciation is a permissible allowance that compensates for capital loss and should not be confined to business profits. The High Court's decision favoring the assessee was upheld, allowing the unabsorbed depreciation to be deducted from dividend income.