TMI Blog2007 (3) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances of the case, the Tribunal was right in holding that while computing the book profit under Section 115J of the Income Tax Act, the unabsorbed depreciation/ business loss of earlier years should be taken without adjusting the profit earned in some of the intervening years against the loss of other years?" 2. The assessee company is engaged in the business of manufacture of yarn. The assessment was completed under Section 143(3) of the Income Tax Act (for brevity, "the Act") computing taxable income at nil and book profits under section 115J of the Act at Rs.26,70,467/-. Finding there was a mistake in the assessment order in the computation of profits under Section 115J, viz., the unabsorbed losses were taken at a higher figure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income-tax Act, 1961, is a special provision relating to certain companies. Section 115J(1) requires the total income of the company, to which that section may become applicable, to be 'as computed under this Act in respect of any previous year relevant to the assessment year. . .'By declaring in sub-section (2) that nothing contained in sub-section (1) will affect the determination of the amounts in relation to the relevant previous year to be carried forward to the subsequent year or years under section 32(2), section 32A(3), section 72(1)(ii), section 73, section 74, section 74A(3) or section 80J(3), Parliament has made it clear that the determination of the amounts to be carried forward is to be made in the normal way by applying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e years following the year in which section 115J(1) ceased to apply. Such a set off is not to be deemed to have not been done nor can a set off so done be ignored after the last of the assessment years to which section 115J(1) applied.... The plain words of section 115J(2) are that the determination of the amount in relation to the previous year to be carried forward to the subsequent year under the provisions referred to therein shall not be affected by anything contained in sub-section (1). These words are clear enough. The fact that a part of the income, which is set off against the carried forward loss and depreciation even when, as a result of such set off, is not available for being taxed, is nevertheless deemed to be available fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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