Prior-year loss deduction excluded in net profit computation under the amended Companies Act remuneration provision.

Section 349(4)(1) of the Companies Act, 1956, as amended in 1960, permits deduction only of an excess of expenditure over income arising in the relevant statutory computation year and carried forward without prior adjustment. The amended wording was treated as deliberate and materially narrower than the earlier reference to loss, so previous-year losses could not be implied into the computation. Applying expressio unius est exclusio alterius, the provision was read as excluding any deduction beyond the express statutory language. On the stated facts, there was no unadjusted prior-year excess available for carry forward, so the earlier loss was not deductible in computing net profits for managing agents' remuneration.

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Issues: Whether, in computing net profits for the purpose of managing agents' remuneration under the Companies Act, 1956, the previous year's loss could be deducted under section 349(4)(1).

Analysis: Section 349(4)(1), as amended by the Companies (Amendment) Act, 1960, permits deduction only of the excess of expenditure over income arising in the relevant statutory computation year and carried forward without being deducted in any subsequent year. The amended language is materially different from the earlier provision referring to loss, and the Court treated that change as deliberate. On the facts, there was no unadjusted excess of a previous year that could be brought forward. The express wording of the clause, read with the principle expressio unius est exclusio alterius, excluded any further implication that previous years' losses could be deducted.

Conclusion: The previous year's loss was not deductible under section 349(4)(1), and the issue was answered in the negative, in favour of the plaintiff.

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