Law:

Section:

2008] 303 ITR 279 [2007] 162 Taxman 129 (Punjab & Haryana) HIGH COURT OF PUNJAB AND HARYANA Laxmi Pipes (P.) Ltd. v. Commissioner of Income-tax (A) M.M. KUMAR AND RAJESH BINDAL, JJ. IT REFERENCE NO. 113 OF 1997 APRIL 5, 2007 Section 115J of the Income-tax Act, 1961 - Zero-tax companies - Assessment year 1989-90 - Whether 'loss' mentioned in clause (b) of first proviso to sub-section (1) of section 205 of Companies Act, read with section 115J, does include 'unabsorbed depreciation' - Held, yes - Whether, therefore, where there was no business loss or loss was less than brought forward depreciation, Assessing Officer was justified in not taking brought forward depreciation into account while working out book profit under section 115J, read with section 205(1), first proviso (b), of Companies Act - Held, no FACTS The assessee-company computed the book profit at minus figure after adjusting the unabsorbed depreciation for the year ending on 31-12-1987. The Assessing Officer, however, observing that there was no business loss, computed book profit under section 115J without taking into account brought forward depreciation. On appeal, Commissioner (Appeals) upheld the order passed by the Assessing Officer. The Tribunal holding that 'loss' mentioned in clause (b) of the first proviso to sub-section (1) of section 205 of the Companies Act, 1956, read with section 115J does not include 'unabsorbed depreciation' concluded that as there was no business loss or the loss was less than the brought forward depreciation, the Assessing Officer was justified in not taking brought forward depreciation into account while working out the book profit. In reference, the assessee's case was that the word "loss" as used in the proviso clause (b) to section 205 of the Companies Act signifies the amount arrived at after taking into account the amount of depreciation. HELD Section 115J was introduced in the assessment year 1988-89. It provides that if the assessee is a company and its total income determined under the Act in respect of a previous year is less than thirty per cent of its book profit, fictionally it would be deemed that its total income chargeable to tax for the…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492