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TMI Blog2011 (8) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... such depreciation was not carried forward?" 2. In respect of the assessment year 1989-1990, the assessee filed a return of income, on 29.12.1989, returning NIL income and profit under Section 115J to the tune of 2,79,38,140/-. Subsequently, a revised return was made wherein there was a claim on the investment allowance. The Assessment was completed by the Assessing Officer claiming that an extent of Rs.2,01,38,614/- was to be deducted towards unabsorbed depreciation for the year 1987-1988. Thus the adjusted profits was arrived at Rs.9,31,27,144/-; 30% of the above was arrived at Rs.2,79,38,143/-. 3. In exercise of the powers under Section 263 of the Income Tax Act, 1961, the Commissioner of Income Tax initiated revisional pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there was no unabsorbed loss or unabsorbed depreciation for being carried forward to the next year. Although the company incurred a loss during that period it was the unabsorbed loss and depreciation which were adjusted against the committed reserve. It was also pointed out that the assessee declared dividend thereon. 6. Having regard to the above said facts and that the company in order declared the dividend in the previous year relating to the assessment year 1989-1990, the assessee rightly, took the unabsorbed depreciation and loss to the General Reserve and got it adjusted thereon, hence, the entire book profit of Rs.11,22,65,758/- was to be taken as a profit for the year and 30% of the same was to be assessed at the hands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt revealed a positive profit and dividend was also declared thereon, there was nothing to be carried forward on the unabsorbed depreciation for being considered under year under consideration. Thus, if dividend is to be declared, as per Section 205(1) of the Income Tax Act, the same is possible only after deduction of the loss or depreciation from the current year profit. Since the unabsorbed depreciation was already adjusted towards the general reserve of the previous year, there being no loss to be carried forward, the Tribunal committed a serious error in accepting the plea of the assessee. 9. In spite of service of notice on the assessee, there is no representation on the assessee's side. Consequently, after going through the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he profit for the next year in terms of Section 205(1) (b), yet, the fact remains that when the accounts were made up for the assessment year 1989-1990, the loss and unabsorbed depreciation remained NIL. On the factual position that the assessee had no unabsorbed loss or unabsorbed depreciation to be carried forward for any consideration in the year under consideration, rightly, the Commissioner of Income Tax gave the direction which is in accordance with the provisions of the Act, as well as the Income Tax Act, 1961. 12. Going by the above said aspect, we have no hesitation in setting aside the order of the Tribunal, the same being contrary to the facts as projected in the balance sheet of the company for the immediate preceding ye ..... X X X X Extracts X X X X X X X X Extracts X X X X
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