9911796707
TMI Blog1992 (2) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... s a/c Rs. 31,150 --------------------------- Rs. 25,79,240 --------------------------- This is adjusted against : 1. Unabsorbed depreciation b/f from 1982-83 Rs. 13,68,053 2. Business loss 1982-83 Rs. 10,501 3. Unabsorbed investment allowance b/f from 1982-83 Rs. 7,97,953 4. C/f business loss in Assessment Year 1981-82 (as per revision order) Rs. 18,733 5. Current years investment allowances Rs. 4,15,024 --------------------------- Rs. 26,10,264 --------------------------- Net loss Rs. 31,024 II. Income from other sources as returned Rs. 15,882 --------------------- Net loss representing unabsorbed investment allowance c/f in 1983-84 Rs. 15,142 --------------------- CLOSED AS 'ND' FOR 1983-84. " The assessment for the assessment year 1984-85 was completed on 27-1-1987. The relevant portion of the assessment order reads as under :---- Rs. " Income from business (as per revised statement) (-)18,43,994 Less: Disallowed under section 43B (Loss) 885 --------------------------- 18,43,109 Income from other sources 25,306 --------------------------- (-)18,17,803 --------------------------- CLOSED AS 'ND' FOR 1984-85 To be ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax, and praying that the proceedings under section 263 be dropped. The said contention did not find favour with the CIT who passed the impugned orders in revision. In the order in revision relating to the assessment year 1983-84, he directed the Assessing Officer " to complete the assessment afresh after duly disallowing the claim for setting off of the unabsorbed investment allowance brought forward from the assessment year 1982-83 ". In the order in revision relating to the assessment year 1984-85, he directed the Assessing Officer to withdraw the benefit of carry forward of unabsorbed investment allowance erroneously allowed to the assessee. 5. It is in these circumstances that the assessee is now before us. 6. Shri G. Bhaskar, the learned counsel for the assessee, took us through the facts and circumstances of the case, and contended that the CIT was not justified in interpreting the provisions of section 32A the way he did. Parficularly as respects the order in revision relating to the assessment year 1983-84. Shri Bhaskar made the further point that the CIT could not have interfered with the assessment for the assessment year 1983-84 without first interfering with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt allowance and the like was incorporated into the Act. 11. A couple of points may here be made. The right to get the benefit of a particular incentive is to be distinguished from the amount or the quantum of the incentive in question. In order to acquire the right to get the benefit of an incentive, the assessee must first establish that it is entitled to the incentive in question. This the assessee will be able to do only if it satisfies the pre-conditions --- threshold conditions --- prescribed by the statute. Once the 'threshold conditions' are satisfied --- there can be no compromise on them --- the other provisions of the Act relating to a particular incentive must be so construed as to ensure that the benefit of the incentive reaches the assessee and is not denied on flimsy, technical grounds. In other words, those provisions which confer on the assessee the right to a particular incentive will have to be construed strictly. The other incidental provisions must be so construed as to ensure that the benefit reaches the assessee. 12. We may now examine the provisions of section 32A, which govern the grant of investment allowance, in the light of the foregoing principles. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the investment allowance that is admissible to an assessee under section 32A(1) is quantified not with reference to the business profits or the total income of the assessee. It is quantified or expressed as a percentage of the actual cost to the assessee of the ship, aircraft, machinery and plant. In other words, the first step is to quantify the total amount of investment allowance which is admissible under section 32A(1). As already pointed out, if the assessee satisfies the threshold conditions, then it is entitled to the benefit of investment allowance computed in the manner laid down in section 32A(1). Section 32A(3) merely details the mode and mechanics of adjusting the allowance due to the assessee under section 32A(1). If the total income of the assessee [within the meaning of section 32A(3)] is insufficient to absorb in its entirety the investment allowance due to the assessee, then insofar as the assessment year in question is concerned, the quantum of the actual allowance is limited to the quantum of the said total income, the unabsorbed portion of the allowance being carried forward to the subsequent years. 16. In cases where the aforesaid total income is 'nil', n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said total income to 'nil'. But the Legislature did not stop there. It went on to provide that in such cases, the unabsorbed portion will be carried forward to the subsequent assessment year(s). 18. That leads us on to the third category of cases where there is no total income to start with. In cases falling under this category, the Legislature has clearly provided that the entirety of the investment allowance will be fully carried forward to the subsequent year(s). Clearly, the third category of cases is not only aresiduary category but also one that presents a picture diametrically opposite to the one presented by the first category. In other words, while the first category comprises cases where the total income is more than sufficient to absorb in full the investment allowance, the third category comprises cases in which there is no total income to start with. True, the section has labelled this category as category of cases in which the total income of the assessee is 'nil'. Even so, as we see it, there is no warrant, either in law or in logic, to come to the conclusion that when the section talks of 'nil' total income, it talks only of zero total income and not of losses. C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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