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TMI Blog1996 (11) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 115J of the Income-tax Act, 1961 ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that the loss and/or unabsorbed depreciation for all the preceding assessment years are to be taken cumulatively instead of separate consideration in each assessment year in accordance with the provisions of sections 205(1)(b) and 205(2), of the Companies Act, 1956 ?" Question raised by the assessee : "Whether, on the facts and in the circumstances of the case, the Tribunal erred in holding that there was taxable book profits under section 115J ?" The assessee-company carried on the business in manufacturing and sale of wire drawings (steel, etc.). For the assessment year 1988-89, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reference and, accordingly, at the instance of both the parties, a reference has been made by the Tribunal framing the aforesaid questions of law before this court for answer. We have heard learned counsel for both the parties and perused the record. Shri Abhay Sapre, learned counsel for the Revenue, has submitted that the Tribunal has relied on the decision given by the Bench of the Tribunal and that decision has been the subject-matter of challenge before the Andhra Pradesh High Court and the Andhra Pradesh High Court has reversed that judgment of the Tribunal in the case of V. V. Trans-Investments (P.) Ltd. v. CIT [1994] 207 ITR 508. Therefore, learned counsel submits that the order of the Tribunal should be set aside and the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of Parts II and III of Schedule VI to the Companies Act, 1956. The Explanation further lays down that for the purposes of this section, "book profit" means the net profit as shown in the profit and loss account for the relevant previous year prepared under the Companies Act as increased by the conditions, i.e., from (a) to (ha). Then clause (iv) of the Explanation to sub-section (1A) of section 115J of the Act, with which we are concerned, lays down that the amount of the loss or the amount of depreciation which would be required to be set off against the profit of the relevant previous year as if the provisions of clause (b) of the first proviso to sub-section (1) of section 205 of the Companies Act, 1956 are applicable. Section 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at (headnote of [1994] 207 ITR 508) : "Section 115J provides that in the case of an assessee which is a company, if the total income of the previous year was less than thirty per cent. of its book profit, then, the total income of such company should be deemed to be an amount equivalent to thirty per cent. of such book profit, and such income should be chargeable to tax. The assessee has first to compute the total income in accordance with the provisions of the Income-tax Act and if the total income was less than thirty per cent. of the book profits, then it has to prepare a profit and loss account under sub-section (1A) of section 115J for the relevant previous year in accordance with Parts II and III of Schedule VI to the Companies Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer, it appears that there was no such depreciation or loss during 1986-87 and 1987-88. The Assessing Officer has worked out the loss and profit right from the accounting year/assessment years 1974-75 to 1987-88 and from the years 1976 to 1979, the Assessing Officer has given the benefit of depreciation and loss as shown nil profit, whereas from 1979-80 to 1983-84, profit has been shown that it appears to be after giving a deduction of loss or depreciation. Then again during 1984-85 and 1985-86 the assessee has shown the depreciation/loss as nil. Then again in 1986-87 and 1987-88, profit is shown at Rs. 20,65,452. But in the revised computation filed by the assessee, the assessee has shown a carried forward loss of Rs. 15,24,323. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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