Mahendra Mills, the respondent, filed its income tax return for the Assessment Year 1976-77, declaring a loss of ₹22,521. In this return, the company did not claim depreciation of its ... assets. During the assessment proceedings, the Income Tax Officer (ITO) computed depreciation on the company's assets based on available records and allowed it, thereby reducing the business loss that could be carried forward. The company contested this action, arguing that since it had not claimed depreciation, the ITO should not have allowed it