TaxTMI 
TaxTMI 
1997 (10) TMI 396
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....hence not rectifiable under s. 154 of the IT Act without appreciating the fact that there is no ambiguity in the interpretation of cl. (b) to proviso to s. 205(1) of the Companies Act in the application of sub-cl. (iv) of cl. (ba) to Explanation of s. 115J in assessee's case. 2. The appellant prays that the order of CIT(A) on the above ground be set aside and that of the ITO/AC be restored. The appellate craves leave to amend or alter any ground or add a new ground which may be necessary. The assessee filed a return and the assessment was completed under s. 143(1). The previous year for this year consisted of a period of 21 months ending on 31st March, 1989. After completion of the assessment, the AO noticed that the assesse....
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....for the period ended 30th June, 1988 of Rs. 5,17,503 and the profit of Rs. 2,108 for the period ended 31st March, 1989. There is no depreciation as per the books either for the part period ended 30th June, 1988, or the part period ended 31st March, 1989. However, in the absence of depreciation, the assessee claimed that the carried forward loss of Rs. 5,26,056 should be reduced from the aforesaid profits relatable to the asst. yr. 1989-90. The CIT(A) held that this contention raises a debatable issue and so, the determination of the book profits at Rs. 5,19,211 and taxing 30% thereof of Rs. 1,55,883 is beyond the purview of s. 154 and accordingly allowed the appeal of the assessee. 4. Before us, the learned Departmental Representative co....
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.... counsel for the assessee. We. however, make it clear his argument about the deduction for the amounts disallowed under s. 43B is without force. The provisions of s. 115J are a self-contained code and as held by the Hon'ble Andhra Pradesh High Court in the case cited by the learned Departmental Representative supra. So, we do not see how the assessee can be given a deduction for the amounts disallowed under s. 43B in the earlier years while computing the taxable income under s. 115J. We, however, agree with the second argument of the learned counsel for the assessee that the issue whether carry forward loss should be reduced from the profit when there is no carried forward depreciation is a debatable issue under the provisions of cl. (i....
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....hall be set off against the profits of the company for the year for which dividend is proposed to be declared or paid or against the profits of the company for any previous financial year or years; arrived at in both cases after providing for depreciation in accordance with the provisions of sub-s. (2) or against both. (c)'''''" 7. It is evident that s. 205 of the Companies Act places some restrictions on the declaration of dividends out of the profits of the year. If there are carried forward losses of earlier years, atleast the depreciation relatable to those years has to be reduced from the profits of the year before declaring dividends out of such profits. Now the question is what would happen in a case a....