9911796707
TMI Blog1993 (5) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... epreciation of Rs. 17,74,568 was Rs. 24,78,775 ; and the business loss excluding unabsorbed depreciation was Rs. 7,04,207. According to the assessee, for the purpose of computation of income under section 115J it was entitled to set off of Rs. 17,74,568 which was lesser than Rs. 24,78,775. However, the interpretation of the Assessing Officer was that the net loss as per Profit & Loss account should not include the amount of unabsorbed depreciation and as such it was Rs. 7,04,207. He, therefore, compared the loss of Rs. 7,04,207 with the amount of unabsorbed depreciation of Rs. 17,74,568 and treated the amount of Rs. 7,04,207 as the lesser amount between the two and allowed set off of Rs. 7,04,207 only. Thus, according to him, there was posi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are as under : " 115J. (1) (1A) Every assessee, being a company, shall, for the purposes of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956. Explanation : For the purposes of this section, ' book profit ' means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (1A), as increased by--- (a) to (h) if any amount referred to in clauses (a) to (f) is debited or, as the case may be, the amount referred to in clauses (g) and (h) is not credited to the profit and loss account, and as reduced by,--- (i) to (iii) (iv) the amount of the loss or the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Amendment) Act, 1960, then the amount of the loss or an amount which is equal to the amount provided for depreciation for that year or those years, whichever is less, shall be set off against the profits of the company for the year for which dividend is proposed to be declared or paid or against the profits of the company for any previous financial year or years, arrived at in both cases after providing for depreciation in accordance with the provisions of sub-section (2) or against both ; " [Emphasis supplied] 5. Section 211 of the Companies Act has provided the form and contents of balance-sheet and profit and loss account of a Company. Such form and contents or balance-sheet and profit and loss account have been provided in Part I and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction yields a negative figure of profits, it cannot be a ' loss ' as generally understood. Jaipuria 59 ITR 555 (SC) definitely says so as pointed out earlier. Again as pointed out earlier, if it is treated as a genus totally different from a ' loss ', there is no statutory provision that will permit its adjustment against other business income implicit in section 32(2) itself---and against all other income of the assessee as held by the above decisions. We, therefore, do not see why ' loss ' and ' unabsorbed depreciation ' should be treated as antithetical to, or mutually exclusive of, each other. " [Emphasis supplied] 8. Again, the following observations in CIT v. Jaipuria China Clay Mines (P.) Ltd. [1966] 59 ITR 555 (SC) need attention ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
