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TMI Blog1972 (10) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... other heads? " The assessee is a public limited company and the question referred to us relates to the assessment year 1961-62, the relevant previous year the financial year ending March 31, 1961. The income of the assessee from business under section 10 before allowing depreciation was Rs. 1,19,67,810. Out of that, depreciation for the year was deducted as amounting to Rs. 51,80,953. After taking into account the depreciation for the current year, the income left over was Rs. 67,86,857. Besides, there was unabsorbed depreciation of the previous year in respect of which a set-off was claimed. The whole of the sum of Rs. 67,86,857 was permitted to be set off against the unabsorbed depreciation of the previous year. After taking such set-of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court in Commissioner of Income-tax v. Jaipuria China Clay Mines (P.) Ltd. As the ratio of the decision of the Supreme Court directly applies to the facts of the present case, further controversy between the parties does not arise. In the case before the Supreme Court, the total income of the respondent-company for the assessment year 1952-53 before charging depreciation was Rs. 14,041. After deducting depreciation of Rs. 5,360 the Income-tax Officer computed the profit of Rs. 8,681 against the whole of which he set off losses of an earlier year. The Income-tax Officer then computed the dividend income of the respondent at Rs. 2,01,130, determined the total income at that figure and levied tax on it. The respondent claimed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n section 10(2). They all have to be deducted from the gross profits and gains of a business. According to commercial principles, depreciation would be shown in the accounts and the profit and loss account would reflect the depreciation accounted for in the accounts. If the profits are not large enough to wipe off depreciation, the profit and loss account would show a loss. Thereafter, apart from proviso (b) to section 10(2)(vi), neither the Act nor commercial principles draw any distinction between the various allowances mentioned in section 10(2) ; the only distinction is that, while the other allowances may be outgoings, depreciation is not an actual outgoing. A little later it is pointed out that the legislature clearly assumes that eff ..... X X X X Extracts X X X X X X X X Extracts X X X X
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