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2014 (1) TMI 931 - AT - Income TaxApplication of Section 115JB of the Act Held that - The assessee s contended that the Proviso (VII) of Sub Section 2 to S.115 JB applies to the assessee company, as it is a sick industrial company under sub section (1) of S.17 of the Sick Industrial Companies (Special Provisions) Act, 1985 - The Commissioner of Income Tax (Appeals ) observed that the application of the assessee have been rejected by the BIFR at its hearing held on 20.1.2004 - The assessee filed an appeal with AAIFR, which remanded the matter back to the BIFR - the BIFR passed a detailed order rejecting the claim of the assessee on 15.5.2007 - The assessee claimed that it has again filed an appeal before the AAIFR and that certain interim orders are passed - the assessee s claim that it is a sick industrial company under SIC Act, 1985, has not been accepted by the concerned authority there was no infirmity in the order of the CIT(A) Decided against Assessee. Non-treatment of Interest received and miscellaneous income Not Credited to P&L A/C as business income - Held that - The CIT(A ) followed the order in the Assessment Year 2004-05 - the unabsorbed depreciation would get absorbed against income from other sources , and that unabsorbed business loss could not be absorbed during the year, as the assessee has computed a loss Revenue could not point out that the requirements of S.72 are not fulfilled by the assessee Decided against Revenue.
Issues:
Cross Appeals against the order of the Ld.Commissioner of Income Tax (Appeals) for the Assessment Year 2007-08. Detailed Analysis: 1. The assessee derived income from various sources including rent, dividends, service charges, interest, and miscellaneous income. The Assessing Officer assessed the total income at Rs.2,10,45,759/-, computing book profits under section 115 JB of the Act at Rs.2,08,93,431/-. Both the assessee and the Revenue appealed against this assessment. 2. The assessee's appeal raised concerns about the treatment of unabsorbed depreciation and carried forward losses of earlier years. The Ld.Commissioner of Income Tax (Appeals) did not accept the claim that certain income items were business income instead of income from other sources. As the assessee did not specifically raise this issue earlier, the appeal ground was dismissed. 3. Another issue was whether section 115 JB of the Act applied to the assessee. The claim that the company was a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, 1985, was rejected by the concerned authority. The Ld.Commissioner of Income Tax (Appeals) rightly dismissed the claim based on this rejection. 4. The Revenue's appeal contested the treatment of certain income items and the application of section 115 JB. The Ld.Commissioner of Income Tax (Appeals) followed precedent and upheld the treatment of unabsorbed depreciation against income from other sources. The Tribunal also affirmed this decision, noting that unabsorbed business loss cannot be offset when a loss is computed. 5. The Revenue's appeal was dismissed as the requirements of Section 72 were found to be fulfilled by the assessee. Consequently, the orders of the First Appellate Authority were upheld, and both the assessee's and the Revenue's appeals were dismissed. 6. A Stay Application related to the appeals was deemed 'infructuous' and dismissed. The final order was pronounced on 12th July, 2013, in the Open Court.
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