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TMI Blog1959 (6) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... wly established industrial undertaking and was entitled to exemption from payment of tax to the extent prescribed by section 15C of the Income Tax Act. In the year of account 1951-52 the assessee made a profit of ₹ 3,65,000 odd, but after making allowance for the unabsorbed depreciation of the previous years and also the possess carried forward from the previous years, there remained no taxable income and accordingly no demand for tax was made for the assessment year of 1952-53. In assessing the total income the Income Tax Officer did not give the benefit of exemption from payment of tax under section 15C of the Income Tax Act to the assessee. The Income Tax Officer deducted out of the net profits the unabsorbed loss of the previous y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly set aside the order of the taxing authorities and directed the Income Tax Officer to give the benefit of exemption from payment of tax to the assessee under section 15C before setting off the loss brought forward from the preceding year. 3. The Tribunal has at the instance of the Commissioner referred the following question : Whether on the facts and circumstances of the case, the loss brought forward from the preceding year amounting to ₹ 1,15,220 should be set off against the profits of the year of account without allowing the assessee the benefit of section 15C of the Income Tax Act. 4. The question debated before us is as to the priority between the benefit of exemption from payment of tax under section 15C and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ources has to be aggregated and on the income so aggregated, the tax has to be ascertained and against the tax so ascertained credit has to be given for the amounts exempted to the extent permissible under section 15C as well as under sections 15A and 15B. Apparently by enacting section 15C the Legislature has not prescribed for exclusion of a percentage from the head of profits of a new industrial undertaking in the computation of total income but has merely provided a partial exemption from payment of tax by newly established undertakings and, in the natural sequence of computation of tax, the amount of losses carried forward is liable to be deducted out of the income of the year of account and it is only after the question of tax is asce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 24(2) is to be given in the first instance and the unabsorbed depreciation is to be treated as depreciation in the subsequent years. No similar provision is made giving priority to set-off in respect of losses of the previous years over the exemption from payment of tax under section 15C. But proviso (b) to section 10(2) (vi) was enacted to cover cases of competing rival claims for deduction form income in computing the taxable income. The exemption from payment of tax under section 15C and the privilege of carrying forward losses are, however, not benefits of the same category and become allowable to the assessee at different stages of assessment. It is difficult then to visualise a conflict between these two benefits. The absence of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom payment of tax; and if in computing the total income liable to tax and the rates at which the tax is payable set-off of losses of the previous years is to be allowed, it would be difficult to hold that the set-off will be postponed to the benefit of section 15C. The Legislature undoubtedly intended to confer certain benefits upon industrial undertakings to which section 15C applies but we will not on that account be justified in holding that, when the Legislature has not provided that the benefit of section 15C is to be allowed as a deduction from income, deduction substantially of that nature should still be made on the assumption that an absence of an express provision dealing with priority implied that intention. 8. We reframe the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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