1989 (2) TMI 134

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....ng was that the unabsorbed losses of the earlier years have not been set off against the income of these two years. There is no discussion on this point in the assessment order of the Income-tax Officer. The C.I.T. (Appeals) rejected the claim of the assessee by following his earlier order. This point also seems to be covered by the Tribunal order wherein the directions were given to allow loss/depreciation in accordance with law. The learned counsel of the assessee, however, brought to our notice that the Tribunal in a latter decision in the case of Tino Kauin Kaisha Ltd. v. ITO [1988] 26 ITD 326 (Bom.) wherein it was held that even the depreciation would be allowable to be carried forward and set off irrespective of the provisions of sect....

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....cribed under section 72. 4. In the result, the appeals are partly allowed. Per Shri S.P. Kapur, Judicial Member--While agreeing in entirety with the conclusion arrived at by my learned brother vis-a-vis ground No. 2 taken by the assessee-appellant before the Income-tax Appellate Tribunal, I will like to supplement our reasoning in the following terms. 2. Chapter IV in the Income-tax Act, 1961 deals with the topic, 'computation of total income'. Subject matter of charge to income-tax under the provisions of the Income-tax Act, 1961 is 'total income'. This has been defined in section 2(45) to mean the total amount of income referred to in section 5, computed in the manner laid down in the Act. 'Income' has also been defined in sectio....

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....rts with the words, 'notwithstanding anything to the contrary contained in sections 28 to 43A,.........'. This means that in computing profits and gains of shipping business in the case of a non-resident, sections 28 to 43A stand excluded insofar as these are 'contrary' to the text as is found in section 44B. Section 44B lays down a formula, a measure for working out the aggregate of amounts which shall be deemed to be, 'profits and gains of shipping business in the case of a non-resident' and which shall be subjected to charge to tax under the head 'Profits and gains of business or profession'. Now profits and gains of business or profession is not 'total income' but is 'income' and section 2(24)(i) speaks of, 'income includes, (i) prof....