AIR 1999 SUPREME COURT 1455 ::1999 AIR SCW 1146 ::1999 TAX. L. R. 469 ::1999 (3) Com LJ 173 SC ::1999 (4) ADSC 20 ::(1999) 153 CurTaxRep 193 ::1999 (4) SCC 306 ::(1999) 2 Scale 549 ::(1999) 2 SCJ 315 ::(1999) 104 Taxman 188 ::1999 (2) LRI 443 ::1999 (150) Taxation 338 ::1999 (4) Supreme 101 ::1999 (237) ITR 777 ::1999 (5) SRJ 136 ::(1999) 5 JT 192 (SC)

Supreme Court Of India

(From : Andhra Pradesh)*

Hon'ble Judge(s): S. P. Bharucha, R. C. Lahoti , JJ

Loss - Term "loss" used in S. 205(1), Proviso, Cl. (b) of Companies Act - Means amount arrived at after taking into account the amount of depreciation - It has to be so read and understood in context of S. 115-J of I.T. Act.W.P. No. 5408 of 1993, D/- 31-12-1993 (Andh Pra), Reversed. Income-Tax Act (43 of 1961) , S.115J— Companies Act (1 of 1956) , S.205(1) Proviso Cl.(b)— Section 205(1), Proviso Cl. (b), of the Companies Act @page-SC1456 brings out the unabsorbed portion of the amount of depreciation already provided for computing the loss for the year. The words "the amount provided for depreciation" and "arrived at in both cases after providing for depreciation" make it abundantly clear that in this clause 'loss' refers to the amount of loss arrived at after taking into account the amount of depreciation provided in the Profit and Loss Account. The term 'loss' as occurring in Cl. (b) of the proviso to S. 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 S. 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....