Karnataka Small Scale Industries ... vs Commissioner Of Income Tax, Bangalore

The Supreme Court addressed the interpretation of Section 115J(1) of the Income Tax Act, 1961, which mandates that if a company's total income is less than 30% of its book profits, the total income shall be deemed to be 30% of the book profits. The Court upheld the Income Tax Appellate Tribunal's ruling that depreciation deemed to have been allowed under Section 115J(1) must be considered for calculating the written down value of assets in subsequent assessment years. The judgment clarifies that the deemed income under Section 115J(1) does not negate the actual allowances under other provisions of the Act, thus affirming the Tribunal's decision regarding the treatment of business losses and depreciation.