9911796707
TMI Blog1970 (1) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... on and development rebate in respect of this unit for the two assessment years 1959-60 and 1960-61 were as under: Profit Depreciation & development rebate 1959-60 33,118 1,44,361 1960-61 3,64,672 5,07,336 (Development rebate) 3,19,591 1,17,205 ,, --------------------- ------------------------ 3,97,790 10,88,493 ----------------------- ---------------------- In the assessment year 1959-60, the total profit of the old and new units amounted to Rs. 2,42,432 which after the set-off of the amount of depreciation and development rebate left a sum of Rs. 24,183 to be carried forward. In the assessment year 1960-61, the composite business income was Rs. 14,13,604 which after adjustment for depreciation and development rebate left a balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly when there is a loss of the earlier year due to depreciation attributable to the new industrial undertaking which could not be set off against the profits of the earlier years, it has to be carried forward and set off against the income of the current year in working out the income liable to tax under section 10. The Appellate Tribunal, on a second appeal, reversed the decision of the Appellate Assistant Commissioner and restored that of the Income-tax Officer. The assessee made an application under section 66(1) to the Tribunal to refer the following question of law to this court, which the Tribunal did, as in its opinion a question of law did arise out of its order. " Whether, on the facts and in the circumstances of the case, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w industrial undertaking and the profits and gains which that undertaking would obtain during the period of its working. Such, profits of the new undertaking computed in accordance with the provisions of section 10 of the Act do not have any impact or relation to such profits which the assessee, who forms it, may obtain under the Act. No telescoping of the income, profits and gains of the assessee with that obtained by the new industrial undertaking is envisaged in section 15C. The assessee and the undertaking, for purposes of section 15C, independently operate in their respective fields of taxation in so far as section 15C is concerned. That this is the intention and the content of the exemption provided in section 15C is clear from sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without reference to the assessee and its composite trading activity, though such assimilation is allowed generally under the tax laws for the computation of the totality of the assessable income of the assessee. Thus interpreted, section 15C is self-active and the undertaking gains or fails to avail the exemption according to its earning a profit or otherwise, on its own without reference to the assessee. In the instant case it is common ground that as regards the new industrial undertaking the unabsorbed depreciation and development rebate as found during the assessment year 1960-61 was Rs. 6,90,703. During the assessment year 1961-62, the new unit earned an income of only Rs. 1,36,822. Still therefore the depreciation and development re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es including section 15C, which is not contemplated therein. In the instant case the unabsorbed depreciation reckoned during the assessment year 1960-61 has to be carried forward for adjustment during the assessment year 1961-62. Thus adjusted, there is no profit for the new unit, resulting in a "no claim" for exemption under section 15C. Mr. Ramamani would contend that section 15C ought not to be read in that light as it would result in no practical benefit to the assessees at all as complete absorption of depreciation and development rebate may not be easily possible in a new undertaking within the time prescribed. Hardships however are unknown to tax law. An exemption, and so indeed a tax, cannot be evolved on equitable considerations. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
