COMMISSIONER OF INCOME TAX Vs. TATA PETRODYNE LTD

JUDGEMENT

(1.) THIS Appeal by the Revenue challenges the judgment and order passed by the Income Tax Appellate Tribunal, Bench at Mumbai, dated 29th June, 2012 in Income Tax Appeal No. 5108/Del/2004. The assessment year is 2001 -02. Mr. Suresh Kumar, learned counsel, appearing in support of this Appeal invites our attention to the questions at page 4 of the paper book. He submits that all these questions which have been formulated by the Revenue are substantial questions of law and the Appeal, therefore, deserves to be admitted.

(2.) MR . Suresh Kumar submits that the Assessee filed a return of income declaring NIL income. That was processed under section 143(1) of the Income Tax Act, 1961 (for short I.T. Act). During the assessment proceedings, the Assessing Officer, inter alia, disallowed certain amount. That was towards foreign exchange loss, set off of brought forward losses under section 79 of the Income Tax Act. He also computed the book profit at Rs.16,45,76,748/ - under section 115JB of the Income Tax Act. The order of assessment was passed on 19th March, 2004.

(3.) THE Assessee preferred an Appeal to the Commissioner of Income Tax (Appeals) and which has been partly allowed. The Assessee preferred a further Appeal before the Income Tax Appellate Tribunal. Mr. Suresh Kumar submits that the Tribunal erred in law in allowing the set off of brought forward losses and by holding that the Assessee Company was deemed to be a company in which public is substantially interested. It is this finding and conclusion which enabled the Tribunal to eventually hold that section 79 of the Income Tax Act is not applicable. However, the Assessee is a private company and it cannot be held to be one in which the public is substantially interested. Elaborating this submission by relying on the ground in the memo of Appeal, Mr. Suresh Kumar submits that the other question in relation to section 115JB is also a substantial question of law. The book profit will have to be reduced by the unabsorbed depreciation or brought forward losses. Mr. Suresh Kumar submits that this depreciation will not include the amount of depletion of producing assets.