2000 (6) TMI 19

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..... tax while computing the assessee's income under section 115J of the Income-tax Act, 1961 ?" We have heard Shri K. P. Sharma, learned counsel appearing for the Revenue. None puts in appearance on behalf of the respondent-assessee. The matter pertains to the assessment year 1989-90. The reference is at the instance of the Revenue. The question which fell for consideration of the authorities relates to setting off the amount of loss against the profit after taking into account the amount of depreciation under section 115J of the Income-tax Act. Aggrieved by the order passed by the assessing authority, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) directed the Assess .....

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..... v. DCIT [1994] 51 ITD 339 (Bom), held that the aforesaid decisions support the view taken by the Commissioner of Income-tax (Appeals). The Tribunal quoted a passage from the decision of V. V. Trans-Investmens (P.) Ltd. v. CIT [1994] 207 ITR 508 (AP) to the following effect : "Once a provision was borrowed from one enactment and incorporated into another enactment, the interpretation of the provision under the parent enactment was irrelevant and the borrowed provision had to be interpreted in accordance with the provisions of the latter, namely, the borrowing enactment. Therefore, the interpretation of 'loss' and 'depreciation' for the purpose of declaring dividend under the Companies Act, 1956, was irrelevant and their interpretation unde .....

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..... ation are to be applied only in case any ambiguity survives. The Supreme Court observed as follows : "We are of the opinion that the term 'loss' as occurring in clause (b) of the proviso to section 205(1) of the Companies Act has to be understood and read as the amount arrived at after taking into account the depreciation. Then alone the formula prescribed in this clause would make sense and it would be consistent with the object sought to be achieved by enacting section 115J of the Income-tax Act, 1961. If 'loss' were to be taken as pre-depreciation loss then the resultant computation will not be in conformity with the tenor of the provisions of section 205. The language of clause (b) of the proviso to section 205(1) is clear. It applies .....

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