Sen, J. - (1.) In the assessment year 1971-72, the corresponding accounting year ending on June 30, 1970, G. Atherton & Co. (P) Ltd. was assessed to income-tax. In the said year, the assessee was found to have suffered a business loss computed at Rs. 1,00,464. The assessee, however, received by way of interest on securities a gross amount of Rs. 180, interest from bank being Rs. 109 and earned income from dividend, Rs. 1,12,000.
(2.) The Income-tax Officer by deducting from the business loss, the three items of positive income computed the net profit of the assessee at Rs. 11,825 and then deducted Rs. 94,989 claimed in the return on account of depreciation. The total loss suffered by the assessee was thus computed to be Rs. 83,174.
(3.) On an appeal to the Appellate Assistant Commissioner against the assessment, the assessee contended that it was entitled to deduction under Section 80M of the Income-tax Act, 1961 ("the Act"), and that the Income-tax Officer was not justified in disallowing the same. The Appellate Assistant Commissioner held that as the income computed resulted in a net loss, there was no question of allowing any deduction under Section 80M.;