TaxTMI 
TaxTMI 
1979 (1) TMI 55
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....March, 1970, fixing the total income at Rs. 90,790. After adjusting the losses brought forward from the preceding three years, the ITO determined the total income at nil. He recorded also in his order that the following amounts be carried forward : Losses to be carried-forward : --------------------------------------------------------------------------------------------------------------------------------------------------- Asstt. Business loss Unabsorbed depreciation year --------------------------------------------------------------------------------------------------------------------------------------------------- Rs. Rs. 1964-65 ... 4,227 1965-66 ... 8,763 1966-67 ... 45,506 1967-68 49,395 77,181 1968-69 .....
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....s in the case of certain companies.--Notwithstanding anything contained in this Chapter, where a change in shareholding has taken place in a previous year in the case of a company, not being a company in which the public are, substantially interested, no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year unless-- (a) on the last day of the previous year the shares of the company carrying not less than fifty-one per cent. of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than fifty-one per cent. of the voting power on the last day of the year or years in which the loss was incurred ; or (b) th....
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.... was newly incorporated and had not incurred any losses prior to the previous year, unless it came within the exception provided in the statute. Learned counsel for the revenue contended that the Tribunal was not justified in picking out unabsorbed depreciation and development rebate and treating them as if they were not covered by the restrictions in s. 79 in the present case. It may be stated here that there is no dispute about the fact that as far as the general loss is concerned, the provisions of s. 79 would apply in the present case. The only point is whether unabsorbed depreciation and development rebate stand out differently from the general loss to which s. 79 admittedly applies. Learned counsel for the Commissioner relied on....
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....involve this anomaly of the word having different meaning for different assessees. Learned counsel for the revenue relied on two decisions as supporting his stand that " loss " includes whatever has been included in it by way of unabsorbed depreciation and development rebate. The two decisions relied on are CIT v. Chugandas and Co. [1965] 55 ITR 17 (SC) and CIT v. Cocanada Radhaswami Bank Ltd. [1965] 57 ITR 306 (SC). In CIT v. Chugandas and Co. [1965] 55 ITR 17 (SC), the assessee, which was a firm dealing in securities, was assessed to tax under the Indian I.T. Act, 1918. It received substantial amounts as interest on securities in the years 1946 and 1947. The business was discontinued on 30th June, 1947. The question was whether the int....
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....d under the head. " Business " for three succeeding assessment years and the loss was allowed to be set off against the income under the head " Business ". However, when it came to the fourth year, the ITO refused to do so, pointing out that the income from securities was different from the income from business. The Supreme Court pointed out, whether a particular income is part of the income of the business, falls to be decided, not on the basis of the provisions of s. 6 of the 1922 Act but on commercial principles. This decision also was rendered in relation to s. 24(2) of the Indian I.T. Act, 1922, and does not appear to us to throw any light on the interpretation of s. 79. The whole Chapter in which s. 79 occurs has made specific prov....