TaxTMI 
TaxTMI 
1952 (12) TMI 1
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....ng the assessee company's income as ' nil ' and when proceedings under Section 34 were subsequently started to assess the income which the Income-tax Officer believed to have escaped assessment the assessee company is entitled to claim that the loss of profits and gains (including depreciation allowance) sustained by it in the previous year should be determined in the course of such proceedings." We are concerned in this case with the assessment year 1941-42. The Assessee is the Anglo-French Textile Company, a company which is incorporated in the United Kingdom. It owns spinning and weaving mills at Pondicherry in French India and manufactures yarn and cloth there. The raw materials necessary for the manufacture, or at any rate much of i....
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....fficer made the following order which he called an Assessment Order :--- "The company made a nil return of income obviously for the reason that it is not carrying on any business in British India ... I accept the return of income filed by the company and declare it is not liable to tax for the year 1941-42." A year later, namely on 9th March, 1943, the Income-tax Officer sent the assessee a notice under Section 34(1)(b) in the following terms :--- " Whereas in consequence of definite information which has come into my possession I have discovered that your income assessable to income-tax for the year ending 31st March, 1942, has (a) escaped assessment, I therefore propose to assess the said income that has (a) escaped asse....
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....owing provision of Section 34. The first sub-section states that when a notice is issued under that section the Income-tax Officer may proceed to assess or reassess such income, profits or gains or recompute the loss or depreciation allowance and that "the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under sub-section (2) of Section 22." This it is said attracts Section 24(2). We need not decide whether this contention is well founded, namely, whether the assessee can claim to reopen the proceedings, because, even if he can, we are of opinion that he cannot get what he asks for. There is no provision in the Act which entitles the assessee to have a loss recorded or computed....
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....done under Section 10 and not under Section 24(1). See the decision of the Privy Council in Rm. Ar. Ar. Rm. Arunachalam Chettiar v. Commissioner Income-tax, Madras. In the present case, the loss is computed striking a balance in the profit and loss account of just the one business and consequently no question of different heads arises. On both the grounds, therefore, the assessee's contention must fail because, unless the loss can be set-off under sub-section (1) of Section 24, it cannot carried forward under sub-section (2) and if it cannot be carried forward the question of its determination and computation becomes irrelevant. The High Court proceeds on the ground that when proceedings a taken under Section 34 the assessee is not entit....