COMMISSIONER OF INCOME TAX, KANPUR ETC. vs M/S. MOTHER INDIA

The Supreme Court held that under the Indian Income Tax Act, 1922, specifically Section 10(2)(vi) proviso (b) and Section 24(2) proviso (b), unabsorbed carried forward losses cannot take precedence over current depreciation when computing total income for an assessment year. The Court clarified that while unabsorbed losses from previous years are prioritized over unabsorbed depreciation, they do not have priority over current year's depreciation. The appeals were allowed, and the question in the Tax Reference was answered against the assessee.