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TMI Blog2009 (1) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... loss computed by the Assessing Officer in the intimation issued under section 143(1)(a) of the Act. We have heard the learned senior counsel Sri Sarangan appearing for the petitioner and the learned senior counsel Sri P. K. R. Menon appearing for the respondent. 2. For the assessment year 1991-92, the assessee filed its return declaring a loss of Rs.2,74,33,874 which included the claim of depreciation on block assets of Rs.1,35,95,225. However, while assessing the income the Assessing Officer noticed that the assessee has claimed depreciation in full whereas eligibility was only 70 per cent. under the fourth proviso to section 32(1) of the Act. He, therefore, issued proceedings under section 143(1) (a) of the Act. Consequently, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order and remanded the matter to the Assessing Officer for passing fresh orders. However, the Assessing Officer again levied additional tax under section 143(1A) of the Act on the amount of loss reduced in the intimation issued under section 143(1) (a) of the Act. The appeal against this order was unsuccessful and in the second appeal, the Tribunal also confirmed the same, against which this appeal is filed under section 260A of the Act. 3. The learned senior counsel appearing for the appellant-assessee contended that reduction in the claim of depreciation in proceedings under section 143(1) (a) of the Act is not covered by clause (ii) of section 143(1A) (a) of the Act. In support of the said contention, the assessee relied on section 72 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income-tax calculated at the rate of twenty per cent. on the difference between the tax on the total income so increased and the tax that would have been chargeable had such total income been reduced by the amount of adjustments and specify the additional income-tax in the intimation to be sent under sub-clause (i) of clause(a) of sub-section (1) (B) in a case where the loss so declared is reduced under sub clause (ii) of this clause or the aforesaid adjustments have the effect of converting that loss into income, calculate a sum (hereinafter referred to as additional income-tax) equal to twenty per cent, of the tax that would have been chargeable on the amount of the adjustments as if it had been the total income of such person and speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ides that the income referred to in section 28 shall be computed in accordance with the provisions contained in section 30 to section 43D of the Act. Depreciation is an allowance provided under section 32 of the Act and, therefore, depreciation has to be reckoned in the computation of business income. Therefore, whenever the assessee has a claim of depredation in the computation of business income and the result is loss such loss is also covered by section 143(1A) of the Act. Of course, the assessee is right in their claim that section 72 of the Act provides for carry forward and set off of unabsorbed depreciation and business loss. However the same does not mean that depredation is not reckoned for the computation of profits or loss for th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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