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TMI Blog2000 (2) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... 15J of the Income-tax Act by the Appellate Tribunal is correct on law ? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that 'loss' as it appears in section 205(1), first proviso, clause (b) of the Companies Act, 1956, read with section 115J of the Income-tax Act, 1961, means 'including depreciation' ?" The assessment year concerned is 1989-90. The assessee is a domestic company in which the public are not substantially interested. During the relevant period it was engaged in the business of printing newspapers and journals. For the assessment year in question, the assessee filed a return showing a loss of Rs. 4,93,417 which included unabsorbed depreciation relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. "Net loss as per P L a/c for the first period from 1st July, 1987 to 30th June, 1988. 2,38,938 Less : Net profit as per P L a/c for the second period 1st July, 1988 to 31st March, 1989 35,055 --------- Net loss as per books 2,03,883 Less : Investment allowance reserve 3,07,811 --------- Balance profit 1,03,928 Less : Loss under s. 205(1) of the Companies Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the word "loss" is always taken as including "depreciation". If depreciation were to be excluded, the Legislature would have used the term "cash loss". A comparison may be made with the language employed in section 3(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (in short "the Sick Industrial Act"), wherein a distinction is made between "accumulated loss" and "cash loss". In Garden Silk Weaving Factory v. CIT [1991] 189 ITR 512, the apex court has observed that unabsorbed depreciation was a part of the loss. Section 349(4)(1) of the Companies Act uses the expression "excess of expenditure over income" which is narrower in scope and excludes "depreciation". There is no reason to assign to the term "loss" as occurring ..... X X X X Extracts X X X X X X X X Extracts X X X X
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