2007 (2) TMI 105

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ccount is not to be increased by all the items in the clause (a) to (ha) of the Explanation to section 115J(1A) ? 2. Whether, on the facts and circumstances of the case, the Tribunal is right in holding that the unabsorbed depreciation to be carried forward should be, enhanced by an amount equal to the income assessed to tax under section 115J ?" 2 The Revenue is the appellant. The assessment year involved in this appeal is 1988-89, The assessee is a leasing company. The assessee filed its of income for the assessment year 1988-89 on July 29, 1988, declaring an income of Rs. 19,40,250. Even though the business loss of Rs.77,65,191 has been worked out for income-tax purpose, the short question that arises for our consideration is wheth....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....absorbed depreciation to be carried forward was Rs. 19,40,250 more than that allowed by the Assessing Officer. 5 On appeal at the instance of the assessee, the Commissioner of Income-tax (Appeals) disallowed the appeal by his order dated June 17, 1991, holing that a plain reading of the Act makes it clear that it was not the intention of the Legislature to restrict the addition to one of the items in section 115J enumerated at (a) to (f) ; the Explanation clearly mentions that the book profit is to be increased by these amounts if any such amount is debited to the profit and loss account; the wording is "not any one such amount" or "lease of any such amounts"; the Explanation does not qualify the words "as increased by" ; the existence o....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the case of Lallacherra Tea Co. P. Ltd. v. CIT [1999] 239 ITR 611, directed the Assessing Officer to enhance the depreciation for an amount equal to the income assessed to tax under section 115J. Hence, the present appeal raising the above substantial questions of law. 7 The law on the point is now settled by the apex court in Karnataka Small Scale industries Development Corporation Ltd. v. CIT [2002] 258 ITR 770 wherein the view of the Andhra Pradesh High Court in Suryalatha Spinning Mills Ltd. v. Union of India [1997] 223 ITR 713 was approved and the ratio laid down in Lallacherra Tea Co. P. Ltd. [1999] 239 ITR 611 (Gauhati) was overruled. 8 In Karnataka Small Scale Industries Development Corporation Ltd. v. CIT [2002] 258 1TR 770,....