| Case ID |
0bd2adff-bba5-4907-af30-319303d1b059 |
| Body |
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| Case Number |
IT REFERENCE No. 83 OF 1966 |
| Decision Date |
Apr 14, 1972 |
| Hearing Date |
|
| Decision |
The court held that in the case of a registered firm, if full effect has not been given to the depreciation allowance in the assessment of partners, the unabsorbed depreciation allowance must be carried forward before determining the income of the firm. Furthermore, carried forward business losses must be considered first before applying any carried forward depreciation allowances. The tribunal's decision to deny the set off of the business loss for the assessment year 1957-58 was justified, as the law specifies that losses allocated to partners cannot be claimed by the firm itself for future tax assessments. |
| Summary |
In the landmark case of Ballarpur Collieries Co. v. Commissioner of Income Tax, the Bombay High Court addressed critical issues regarding the treatment of depreciation and business losses under the Income-tax Act, 1961. The court examined whether unabsorbed depreciation could be carried forward for a registered firm when full effect had not been given in previous assessments. The decision clarified the precedence of carried forward business losses over depreciation allowances, establishing important precedents in tax law. This case is significant for tax practitioners and firms navigating complexities in income tax assessments, particularly regarding the handling of depreciation and loss carry forwards, which are vital for optimizing tax liabilities. The ruling emphasizes the importance of understanding tax provisions and their implications on firm assessments, making it a key reference point for legal professionals and accountants alike. |
| Court |
Bombay High Court
|
| Entities Involved |
Not available
|
| Judges |
Deshmukh, J.,
Chandurkar, J.
|
| Lawyers |
S.P. Mehta,
Vasant Mehta,
C.J. Thakar,
R.M. Hajarnavis
|
| Petitioners |
Ballarpur Collieries Co.
|
| Respondents |
Commissioner of Income Tax
|
| Citations |
1973 SLD 720,
(1973) 92 ITR 219
|
| Other Citations |
CIT v. Jaipuria China Clay Mines (P.) Ltd. [1966] 59 ITR 555,
CIT v. Kantilal Nathuchand Sami [1967] 63 ITR 318,
CIT v. Ravi Industries Ltd. [1963] 49 ITR 145,
S. Sankappa v. ITO [1968] 68 ITR 760
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
32,
75
|