The expression 'loss' under the Companies Act is to be reckoned after allowance of depreciation, and interest under Sections 234B and 234C cannot be charged for income determined under Section 115J.

V.K. Singhal, J.— The Assistant Registrar of the Income Tax Appellate Tribunal has referred the following question of law arising out of its order dated March 3, 1994, in respect of the assessment year 1989-90, under Section 256(1) of the Income Tax Act, 1961 :

"(1) Whether, on the facts and in the circumstances of the case for the purpose of Section 115J of the Act read with Section 205(1)(b) of the Companies Act, 1956, the expression 'loss' under the Companies Act is to be reckoned after allowance of depreciation or before it ?

(2) Having regard to the scheme of Section 115J whether in an assessment year where the assessee's income is computed by invoking the provisions of Section 115J interest under Sections 234B and 234C are leviable ?

(3) Whether, on the facts and in the circumstances of the case, the amounts to be carried forward like unabsorbed depreciation, unabsorbed investment allowance and business loss from an assessment year to which the provisions of Section 115J are applied should be those Which were available to the assessee as at the commencement of the previous year relevant to the said assessment year unaltered by the making of an assessment under Section 115J for that assessment year ?

(4) Whether, on the facts and in the circumstances of the case, the carried forward amounts like unabsorbed depreciation, investment allowance and business loss should be reckoned as if a regular assessment is made under Section 143(3)/144 of the Act for the year in question and only such sums as emerge after the making of such a notional assessment for that year could be carried forward ?

(5) Whether, on the facts and in the circumstances of the case, the written down value as at the commencement of the relevant previous year in respect of the assets then in existence for the current assessment year should remain the same for the immediately succeeding assessment year unaltered by any notional assessment that might be made for the purpose of examining the applicability of Section 115J ?

(6) Whether, on the facts and in the circumstances of the case, the amount of depreciation which is absorbed in a notional assessment under Section 143(3)/144 for the relevant assessment year reducing the income to nil should be deemed to have been actually allowed for the purpose of working out the written down value for the immediately subsequent assessment year ?

(7) Whether, on the facts and in the circumstances of the case, the sum of Rs. 83,61,301 written back to the profit and loss account for the assessment year 1987-88 should not have been excluded for the purpose of computation of profits under Section 115J read with Section 205 of the Companies Act, 1956 ?"

2. The facts of the case are that the assessee is a manufacturing company and for the assessment year in question, its income was computed by invoking the provisions of Section 115J. While concluding the assessment, the Assessing Officer, for the purpose of applying the provisions of Section 205(1)(b) of the Companies Act held that the expression "loss" therein is before allowance of depreciation and not after deduction of depreciation. He also proceeded on the basis that even though the income as per the normal computation under the Income Tax Act led to a negative figure still the assessee was liable to pay advance tax and its failure t6 pay such advance tax would invite the levy of penal interest under Sections 234B and 234C. He also determined the amounts to be Carried forward to the subsequent year like losses, unabsorbed depreciation, etc., by making a notional assessment under Section 143(3) and on the basis that such an assessment was made he proceeded to determine the amounts to be carried forward as well as the written down value to be adopted for the subsequent year for the purpose of allowance of depreciation. While computing the profits for the purpose of Section 115J and making the adjustments thereof, as provided by law, the Assessing Officer did not deduct the su