M/S KARNATAKA SMALL S.INDT.DEV.COR.LTD. vs COMMISSIONER OF INCOME-TAX,BANGALORE

The Supreme Court addressed the applicability 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 be allowed under this section 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 interpretation of the law.