TMI Blog1996 (8) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in allowing the unabsorbed depreciation of Rs. 15,49,066 representing earlier years in the place of unabsorbed business loss of Rs. 7,78,541 for determining the book profit of the year? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in allowing extra depreciation of Rs. 21,19,371 from the book profit arising due to change in method of depreciation? (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in directing the Assessing Officer not to interfere with the balance-sheet of the assessee for working out the book profit?" Briefly stated, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15,49,066. The assessee then filed an application under section 154 of the Act with a prayer to allow depreciation of earlier years amounting to Rs. 15,49,066 from the profit while calculating book profit under section 115J as it was less than the total of business loss including unabsorbed depreciation. The Assessing Officer rejected the application. In appeal, the Commissioner of Income-tax (Appeals) confirmed the order of the Assessing Officer. The Tribunal on further appeal held that the provisions of the Companies Act should be construed to mean that the loss includes the depreciation and unabsorbed depreciation also. The Tribunal, thus, held that computation of loss should necessarily include the amount of depreciation and unabsorbed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns in CIT v. R. J. Trivedi and Sons [1990] 183 ITR 420 (MP) and Garden Silk Weaving Factory v. CIT [1991] 189 ITR 512 (SC). In the case of R. J. Trivedi and Sons [1990] 183 ITR 420 (MP), it is held as under : "Depreciation represents the diminution in the value of an asset, when applied to the purpose of making profit or gain (see Webster's New World Dictionary and Workmen of National and Grindlays Bank Ltd. v. National and Grindlays Bank Ltd. [1976] AIR 1976 SC 611). Depreciation is thus related to an asset and is a notional loss as against the actual loss in the sense of outgoings of a business. So far as carrying forward of loss is concerned, section 75 places the restriction that it can be carried forward only in the hands of a part ..... X X X X Extracts X X X X X X X X Extracts X X X X
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