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TMI Blog1997 (9) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... clause (b), of the Companies Act, 1956, read with section 115J of the Income-tax Act, 1961, means excluding depreciation ? (2) Whether, on the facts and in the circumstances of the case, the interpretation of the word 'loss' sought to be put on section 115J of the Income-tax Act by the Tribunal is correct in law ? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in placing reliance on the judgment of V. V. Trans-Investments (P.) Ltd. v. CIT [1994] 207 ITR 508 ? (4) Whether, on the facts and in the circumstances of the case, the judgment of the Andhra Pradesh High Court in the case of V. V. Trans-Investments (P.) Ltd. v. CIT [1994] 207 ITR 508 was a binding precedent for the Income-tax Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under : "The amount of the loss or the amount of depreciation which would be required to be set off against the profit of the relevant previous year as if the provisions of clause (b) of the first proviso to sub-section (1) of section 205 of the Companies Act, 1956 (1 of 1956), are applicable." Section 205(1), clause (b) of the first proviso of the Companies Act, which is relevant for our purposes, reads as under : "If the company has incurred any loss in any previous financial year or years, which falls or fall after the commencement of the Companies (Amendment) Act, 1960, then, the amount of the loss or an amount which is equal to the amount provided for depreciation for that year or those years whichever is less, shall be set off agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... says how depreciation has to be worked out. The basic idea behind clause (b) of the first proviso to sub-section (1) of section 205 is that after working out depreciation or loss for that year or those years, whichever is less, shall be set off against the profits of the company for the year for which dividend is proposed to be declared. Therefore, as a result of this statutory incorporation, the loss or depreciation whichever is less, shall be set off. In this connection, our attention was invited to the decision of the Andhra Pradesh High Court in the case of V. V. Trans-Investments (P.) Ltd. v. CIT [1994] 207 ITR 508. In that case, it was held that section 205(1)(b) has been fictionally incorporated in the Income-tax Act but still their ..... X X X X Extracts X X X X X X X X Extracts X X X X
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