2009 (3) TMI 16 - HC - Income Tax

Revenue contend that loss did not include depreciation debited in books and by ignoring the figure of depreciation in the books, there was no loss, then nothing was to be deducted - held that the word loss in proviso to S. 205(1) (b) of the Companies Act signifies the amount arrived at after taking into account amount of depreciation and it has to be so read in the context of S. 115 J so, tribunal rightly allowed further deduction on account of unabsorbed depreciation, from the book profit

Summary

The Bombay High Court ruled in favor of the applicants regarding the deduction of unabsorbed depreciation from the book profit. The court referred to a Supreme Court judgment in the case of Surana Steels Pvt. Ltd. and concluded that depreciation must be considered in determining the loss for tax purposes. The Tribunal's decision was upheld, and the rule was discharged.