Law: Income Tax Act, 1961

Section: 115,115J,205,205(1)

(a) Income-tax-Company---Computation of book profits for purposes of S.115J--­Meaning of word "'loss" in proviso (b) to S.205(1) of Companies Act read with S.115J of Income Tax Act---Loss includes unabsorbed depreciation--­Indian Income Tax Act, 1956, 5.205---Indian Income Tax Act, 1961, S.115J. Clause (iv) of the Explanation to section 115J of the Income Tax Act, 1961, incorporates the provisions of section 205 of the Companies Act, 1956. If a subsequent Act brings. into itself by reference some of the clauses of a former Act, the legal-effect of that- is to write those sections into the new Act. Once the object behind the legislation is taken note of, the inevitable conclusion is the provisions of section 205 stand bodily lifted and incorporated into the body of section' 115J of the Income-tax Act. On a plain provision, the irresistible conclusion is that section 205(1), first proviso, clause (b) of the Companies Act-brings out the unabsorbed portion of the amount of depreciation already provided for computing the loss for the year. The expressions "the amount provided for depreciation' and 'arrived at in both cases after providing for depreciation" make it abundantly 'clear that in this clause "loss" refers to the amount of loss arrived at after taking into account the amount of depreciation provided in the profit and loss account. Surana Steels (Pvt.) Ltd. v. Deputy CIT (1999) 237 ITR 777 (SC) applied. Garden Silk Weaving Factory v. CIT (1991) 189 ITR 512 (SC) and V.V. Trans-investments (P.) Ltd. v. CIT (1994) 207 ITR 508 (AP) ref. (b) Interpretation of statutes---- Effect of incorporation of provision of another Act. THIS JUDGMENT DELIVERED BY: ARIJIT PASAYAT, C.J.---At the instance of the assessee, the following questions have been referred to this Court, for opinion in terms of section 256(1) of the Income Tax Act, 1961 (in short "the Act"), by the Income-tax Appellate Tribunal, Cochin Bench (in short "the Tribunal") "(1) Whether, on the facts and in the circumstances of the case, the interpretation sought to be put on section 1151 of the Income-tax Act by the Appellate Tribunal is correct on law? (2) Whether, on the facts and in the circumstances of the…

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