9911796707
TMI Blog2008 (1) TMI 377X X X X Extracts X X X X X X X X Extracts X X X X ..... rthasarathi for the appellant. M. V. Seshachala for the respondent. JUDGMENT The judgment of the court was delivered by DEEPAK VERMA J. - Heard Sri Parthasarathi for the appellant and Sri M. V. Seshachala for the respondent. 2. This is an appeal under section 260A of the Income-tax Act, 1961 (hereinafter referred to as "the Act") against the order dated October 31, 2002, passed by the Income-tax Appellate Tribunal in I.T.A. No. 561/Bang/1995. 3. The appeal has been admitted on as many as four questions of law. But during the course of the arguments, the learned counsel for the appellant submitted that only question No. (b) may be answered. Question No. (b) reads as hereunder: "(b) Whether the Tribunal was right in l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal under section 260A of the Income-tax Act, at the instance of the assessee on the aforesaid substantial question of law. 7. We have accordingly heard the learned counsel for the parties and perused the record. 8. The Finance Act, 1990, had amended section 32A(4)(ii) of the Act retrospectively from April 1, 1976. It provides that the investment allowance reserve account for an amount equal to 75 per cent. of the investment allowance to be actually allowed is to be created by debiting such amount to the profit and loss account of any previous year in respect of which the deduction is to be allowed under section 32A(3) of the Act or any earlier previous year not being a previous year earlier than the year in which the plants and m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fits or for the creation of any asset outside India :" 9. It has not been disputed before us that for the assessment years 1985-86, 1986-87 and 1987-88 the return filed by appellant-assessee reflected losses. The learned counsel for the appellant contended that when the appellant had incurred losses for the aforesaid assessment years, the question of making any reserve account to the extent of 75 per cent. of the cost of the plants and machineries installed during the said assessment years did not arise. It was submitted that the assessee had filed return of profit income for the assessment year 1991-92. The assessee had profit for the first time in that year. After filing the initial return, a revised return was filed in which investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in writing to make good the deficiency in the reserve." 12. As mentioned herein above it has not been disputed by the Revenue that the assessee had sustained losses in the years 1985-86, 1986-87 and 1987-88. Obviously, when it had suffered losses for the aforesaid assessment years, the question of keeping reserve account did not arise. In our considered opinion that appears to be the purpose and object of the amendment incorporated by the Finance Act, 1990. Otherwise the very purpose of such an amendment is likely to be defeated. 13. For the aforesaid reasons, we are of the opinion that the impugned order passed by the Tribunal cannot be sustained in law. It is accordingly hereby set aside and quashed. The question is answered in f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
