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TMI Blog2007 (2) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case, the Tribunal is right in holding that, while computing the book profit under section 115J, the net profit shown in the profit and loss account is not to be increased by all the items in the clause (a) to (ha) of the Explanation to section 115J(1A) ? 2. Whether, on the facts and circumstances of the case, the Tribunal is right in holding that the unabsorbed depreciation to be carried forward should be, enhanced by an amount equal to the income assessed to tax under section 115J ?" 2 The Revenue is the appellant. The assessment year involved in this appeal is 1988-89, The assessee is a leasing company. The assessee filed its of income for the assessment year 1988-89 on July 29, 1988, declaring an income of Rs. 19,40,250. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wable to adjust against the allowance of depreciation because a sum of Rs. 19,40,250 was brought to tax under section 115J, which would mean that the unabsorbed depreciation to be carried forward was Rs. 19,40,250 more than that allowed by the Assessing Officer. 5 On appeal at the instance of the assessee, the Commissioner of Income-tax (Appeals) disallowed the appeal by his order dated June 17, 1991, holing that a plain reading of the Act makes it clear that it was not the intention of the Legislature to restrict the addition to one of the items in section 115J enumerated at (a) to (f) ; the Explanation clearly mentions that the book profit is to be increased by these amounts if any such amount is debited to the profit and loss accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... note of while considering, the question of carrying forward the adjusted loss. However, the Appellate Tribunal, following the decision of the Gauhati High Court in the case of Lallacherra Tea Co. P. Ltd. v. CIT [1999] 239 ITR 611, directed the Assessing Officer to enhance the depreciation for an amount equal to the income assessed to tax under section 115J. Hence, the present appeal raising the above substantial questions of law. 7 The law on the point is now settled by the apex court in Karnataka Small Scale industries Development Corporation Ltd. v. CIT [2002] 258 ITR 770 wherein the view of the Andhra Pradesh High Court in Suryalatha Spinning Mills Ltd. v . Union of India [1997] 223 ITR 713 was approved and the ratio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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