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TMI Blog2014 (10) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed that its total income chargeable to tax for the relevant previous year was an amount equal to thirty per cent of such book profit - The depreciation is provided for in the Profit and Loss Account - The loss is arrived at after taking into account the depreciation provided - the word loss as used in proviso clause (b) to Section 205 (1) signifies the amount arrived at after taking into account the amount of depreciation and it has to be so read and understood in the context of Section 115J of the Income-tax Act, 1961 - the term 'loss' as occurring in clause (b) of the proviso to Section 205 (1) of the Companies Act has to be understood and read as the amount arrived at after taking into account the depreciation and that If 'loss' were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer u/s 234. The CIT (Appeals) however held that for the purpose of computation of book profits u/s 115J of the Act while adjusting carried forward loss the same should be taken as before depreciation instead of considering the same after depreciation. Being aggrieved by the said rejection, the assessee filed an appeal before the Tribunal. The Tribunal allowed the appeal. On an application made by the revenue, questions of law were framed and referred for the opinion of the High Court. The questions referred to this Court for consideration are now squarely covered by the decision of the Apex Court in the case of Surana Steels (P) Ltd. vs. Deputy Commissioner of Income-Tax reported in 237 ITR 777 (SC) wherein it is held a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o account the depreciation. The loss being lower than the amount of depreciation, it will be taken into account for set off against the profit of the year in which dividend is to be declared. In example - (2) ₹ 3 lacs is the depreciation. ₹ 4 lacs is the amount of loss after taking into account the depreciation. The depreciation being lower than the amount of loss, ₹ 3 lacs is to be taken into account for set off against the profit of the year for which dividend is to be declared. We are of the opinion that the term 'loss' as occurring in clause (b) of the proviso to Section 205 (1) of the Companies Act has to be understood and read as the amount arrived at after taking into account the depreciation. Then alone the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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