COMMISSIONER OF INCOME TAX Vs. KONGARAR SPINNERS LTD

JUDGEMENT

(1.) THIS appeal is directed against the order of the Income Tax Appellate Tribunal dated 25. 7. 2003 made in ITA. No. 376/mds/1996 for the assessment year 1990-91, raising the following substantial question of law:

(2.) 2. 1. The assessee company is engaged in the business of manufacture of yarn. The assessment was completed under Section 143 (3) of the Income Tax Act (for brevity, "the Act") computing taxable income at NIL and book profits under section 115j of the Act at Rs. 26,70,467/ -. Finding there was a mistake in the assessment order in the computation of profits under Section 115j, viz. , the unabsorbed losses were taken at a higher figure, as furnished by the assessee, without considering the profits earned by the assessee in the earlier years, notice under Section 154 of the Act was issued. The assessee objected to the proposed rectification on the ground that loss or depreciation whichever is less as per the books should be taken and the working given by the assessee is correct. The Assessing Officer, not satisfied with the objections of the assessee reworked the unabsorbed depreciation/ business loss and determined tax under Section 115j of the Act at Rs. 4,86,034/ -.

(3.) HEARD the learned Standing Counsel for the appellant. There is no representation on behalf of the respondent/assessee.