HYDERABAD CONSTRUCTION COMPANY LIMITED Vs. COMMISSIONER OF INCOME TAX ANDHRA PRADESH

JUDGEMENT

(1.) During the calendar year 1965 being the "previous year" for the assessment year 1966-67, the assessee filed a return declaring a loss of Rs. 99,973. While computing the loss, the assessee claimed depreciation of Rs. 13,427 on its assets. In addition to this claim, the assessee claimed set off of unabsorbed depreciation of Rs. 2,77,924 of the previous year against the total income for the assessment year 1966-67.

(2.) The assessee was formerly doing business in manufacture and sale of starch products. The machinery employed was sold away in 1964 to a concern known as Lakshmi Starch Factory.

(3.) The ITO disallowed Rs. 13,427 and negatived the claim for set off of the unabsorbed depreciation of the preceding years and made the following additions and assessed the same under the hear "Business". (i) Rs. 17,846. - Sums forfeited by the assessee as profit under section 41 (1). (ii) Rs. 4,161. - Being the amount due to one Parameswaran, during the course of the business but not paid. (iii) Rs. 5,8881. - Being the interest received from M/s. Lakshmi Starch Factory for the delayed payment of sale proceeds of the factory sold by the assessee in 1964.