9911796707
TMI Blog1977 (11) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... ar of the society was 1st of July to 30th of June and in response to a notice issued under s. 22(2) of the Indian Income-tax Act, 1922, the assessee filed its first return of income for the assessment year 1958-59, showing income as "nil". In the column relating to particular regarding claim for depreciation of the assets also no details were given and the remark was "nil " When the ITO took up the assesment proceedings in respect of the assessment year 1958-59, for consideration, he passed a cryptic order as follows : " The assessee is a co-operative society registered as such, deriving income from its business in the manufacture and sale of sugar and from interest on deposits with other co-operative banks. Under section 14(3) of the I.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be taken into account which was equal to the original cost as reduced by the depreciation amount of Rs. 1,75,361. The ITO, however, found that the correct amount of depreciation permissible in respect of the year 1958-59 was Rs. 1,45,858. The findings given by the ITO were upheld by the AAC and the assessee then filed an appeal before the Tribunal. Now, so far as the order of the Tribunal is concerned, in the opening part of the order it sets out five contentions which are said to have been raised before it by the assessee. The first question which is considered by the Tribunal in paragraph 7 of the order was whether the income of a co-operative society which is exempt from tax under s. 14(3) of the Act is required to be computed at al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount in the first assessment year 1958-59. The contention of the assessee was accepted and on a construction of the assessment order in respect of the year 1958-59 the Tribunal took the view that depreciation cannot be said to have been actually allowed to the assessee in the assessment year 1958-59. In paragraph 10 of the order an additional reason was given by the Tribunal in support of its conclusion, the reason being that in the assessment year 1958-59, no particulars were furnished by the assessee which it was obligatory upon the assessee to do if depreciation is to be claimed under s. 10(2)(vi) of the Act. Thus, in paragraph 11 of the order the conclusion reached by the Tribunal was that the assessee would be entitled to depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2, was liable to be allowed as a deduction when no claim for such deduction was made by the assessee ? " Now, there can be no difficulty in holding that the first question arises out of the findings given by the Tribunal in paragraph 7 of the order where the contention of the assessee considered was that the income of the assessee being that of a co-operative society was excluded and computation of income was not necessary. We have merely to reproduce the provisions of s. 16(1)(a) of the Act to point out that there is no error in the order of the Tribunal when it held that the computation of the income of the assessee, even though it was a co-operative society, was contemplated by the provisions of section 16(1). S. 6(1)(a), so far as is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome, it expressly so provides, as it is done in s. 16 ". The legislature has expressly provided in s. 16(1)(a) that, income exempted under s. 14(3), which deals with the profits and gains of business carried on by a co-operative society, shall be included while computing the total income of the assessee though such inclusion is not for the purpose of determining the rates at which income-tax is payable by the assessee to whom the exemption is given. The Tribunal was, therefore, justified in rejecting the contention of the assessee that for the purposes of computation under s. 16(1)(a), the business income of the assessee-co-operative society could not be taken into consideration. The first question must, therefore be answered in the affirma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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