Judgment :- Sankarasubban, J. These References are at the instance of the Revenue and the assessee. Questions of law referred to are as follows: “1. Was the Tribunal justified in law in holding that the assessment was validly reopened under clause (c) of Explanation 2 to Section 147 of the Income-tax Act in the circumstances of the case? (By the assessee) 2. Was the Tribunal justified in the circumstances of the case that the profit on sale of capital asset is to be reckoned in computing the book profit under S. 115J of the Income-tax Act, 1961? (By the assessee). 3. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the assessee is entitled to set off the amount of loss or the amount of depreciation whichever is less in respect of past years against the profits of the year ending on 30.9.87 relevant to the assessment year 1988-89? (By the Revenue) 4. Whether on the facts and in the circumstances of the case and the circular of the Board being in accordance with the relevant principles of laws having bearing on the issue, should not the tribunal have confirmed the assessment without restoring the case? (By the Revenue) 2. The facts of the case are as follows: The assessee is a private limited company with previous year ending on 30.9.1987 in relation to the assessment year 1988-89. The assessee did not file the return of income under Section 139 (1) nor did it file the written of income within the time allowed pursuant to a notice issued under Section 139(2) dated 16.9.1988. The assessee also did not comply with the notice issued under Section 142(1). However, the Assessing Officer closed the proceedings as follows: “Return of income not yet filed. There is no taxable income from 1984-85 onwards. Assessment may be closed as N.A. for statistical purposes. 3. On 15.3.1990, the assessee filed a return disclosing a loss of Rs.59,02,550/- whereupon the Assessing Officer issued notice under section 148 and completed the assessment under Section 143(3) on 16.7.1992 applying the provisions of Section 115J of the Income Tax Act and determined the income at Rs.6,10,000/- in arriving at the assessable profit under Section 115J, the Assessing Officer deducted the loss or depreciation to be set off under Section 205(1)(b) of the Companies Act in a sum of Rs.5,18,387/-. On appeal, the CIT (Appeals) upheld the reassessment proceedings and also the computation of profit under Section 115J as made by the Assessing Officer. The assessee filed second appeal before the Tribunal. The Tribunal found that the order sheet entry “NA” passed by the Assessing Officer would amount to an assessment order and non-communication of it to the assessee cannot invalidate such an order. 4. So far as the first question is concerned, we agree with the Tribunal. Inspite of the issue of the notice under Section 139(2) dated 16.9.1988 and the notice issued under Section 142(1) dated 8.3.1989, the assessee did not furnish the return and did not comply with the terms of the notices. Such default on the part of the assessee should lead to an assessment under Section 144. The relevant Entry is as follows: “Return of income not yet filed. There is no taxable income from 84-85 onwards. Assessment may be closed as N.A. for statistical purposes”. From the above, it will be evident that the Assessing Officer had closed the assessment as N.A. in view of the fact that the assessee did not have taxable income from 1984-85 onwards. Thus, there has been application of mind on the part of the Assessing Officer to the past records of the assessee even though no return of income was pending before him. As a result of the past history of the assessee from 1984-85 onwards, he had come to the conclusion that there was no taxable income and closed the assessment as ‘N.A’. Thus, the impugned entry will amount to an order under Section 144 of the Income Tax Act. The mere fact that it was not communicated to the assessee will not make such an assessment recorded in the order sheet illegal as has been held in the case of Sivalingam Chettiar Vs. C.I.T. – 62 I.T.R. 678 and C.I.T. Vs. Trustees of H.E.H. The Nzam’s Second Supplemental Family Trust – 151 I.T.R. 562. The Supreme Court in C.I.T. v. Bindhu Bhusan Sarkar – 63 I.T.R. 278 held that the endorsement filed may amount to dropping of the proceedings or disposal of the proceedings and that would not bar further proceedings under Section 147. Hence, the first question is answered in favour of the Revenue and against the assessee. 5. The Supreme Court in C.I.T. v. Bindhu Bhusan Sarkar – 63 I.T.R. 278 held that the endorsement filed may amount to dropping of the proceedings or disposal of the proceedings and that would not bar further proceedings under Section 147. Hence, the first question is answered in favour of the Revenue and against the assessee. 5. So far as the second contention is concerned, it is against the inclusion of the profit on the sale of capital asset amounting to Rs.66,242/- in computing the book profit. The Tribunal held that the no profit on sale of asset shown in the profit and loss account should be reckoned for the purpose of computation of book profit. The second question is answered in favour of the Revenue and against the assessee. 6. Now, we come to the question raised at the instance of the Revenue. The assessment year is 1988-89. Section 115J stipulates computation of book profit for the purpose of assessment under Section 115J, the special provisions relating to certain Companies. As per Clause (iii) the amount of the loss or the amount of depreciation which would be required to be set off against the profit of the relevant previous year is the amount worked out as if the provisions of clause (b) of the first proviso to sub section (1) of section 205 of the Companies Act are applicable. 7. In GTN Textiles Case – 248 I.T.R. 372, it was held that the provisions of clause (b) of the first proviso to sub section (1) of Section 205 of the Companies Act are entirely made applicable in Section 115J of the Income Tax Act. The matter came for consideration before the Supreme Court in 237 I.T.R. 777 in the case of Surana Steels vs. Deputy CIT. The Supreme Court held that in this clause ‘loss’ refers to the amount of loss arrived at after taking into account the amount of depreciation provided in the profit and loss account. Once it is found that the provisions of clause (b) of Proviso to Sub-section (1) of Section 205 of the Companies act are applicable in Section 115J and the object of such incorporation of the said provisions of the Companies Act in Section 115J is to allow set off the losses and unabsorbed depreciation. Once it is found that the provisions of clause (b) of Proviso to Sub-section (1) of Section 205 of the Companies act are applicable in Section 115J and the object of such incorporation of the said provisions of the Companies Act in Section 115J is to allow set off the losses and unabsorbed depreciation. The Tribunal elaborately considered the said provisions and rightly found that the assesses is entitled for adjusting the loss or the unabsorbed depreciation of earlier years. Whichever is less in computation of the book profit under Section 115J. It also considered the Board’s Circular. We agree with the reasoning and conclusions of the Tribunal and we answer the question referred by the Revenue in favour of the assessee. I.T.Rs. are disposed of as above.