1994 (11) TMI 19

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....et off of the business loss carried forward from earlier years ? " The assessee, Rockweld Electrodes India Limited, is a company. Before the Income-tax Officer, the assessee contended that set off of deficiency under section 80J(3) of the Income-tax Act, 1961 (hereinafter referred to as " the Act "), should be made before any set off of the business loss carried forward from the assessment year 1968-69. The Income-tax Officer rejected the contention put forward by the assessee. According to the Income-tax Officer, after arriving at the gross total income in accordance with the provisions of the Act, the relief under section 80J is to be given. Aggrieved, the assessee filed an appeal before the Appellate Assistant Commissioner and by way ....

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....als Nos. 1385 and 1386/(MDS) of 1976-77, dated October 11, 1977, came up for consideration before this court, by way of reference in CIT v. North Arcot District Co-operative Spg. Mills Ltd. [1985] 151 ITR 238, wherein this court has held as under (headnote) : " .... no distinction can be made between the current year's depreciation and carried forward unabsorbed depreciation of the earlier years in view of the specific provisions of section 32(2) of the Income-tax Act, 1961. Giving effect to section 32(2) which deems unabsorbed depreciation of the earlier year as part of the current year's depreciation, the deduction under section 32(1) must relate to both the current year's depreciation as well as the depreciation of the earlier years. ....

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....e case of CIT v. Madras Motors (P.) Ltd. [1984] 150 ITR 150, wherein this court was of the view that " the definition of 'gross total income' contained in section 80B(5) of the Income-tax Act, 1961, as the total income computed in accordance with the provisions of the Act before giving deductions under Chapter VI-A, clearly shows the intention of Parliament that the deduction under Chapter VI-A is contemplated only after the total income is computed after setting off the unabsorbed depreciation as per section 72. Section 72 comes under Chapter VI dealing with aggregation of income. Therefore, section 72 has to be applied before the total income of an assessee is determined, that is, before the deductions under Chapter VI-A are allowed ". Th....