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TMI Blog2010 (5) TMI 657X X X X Extracts X X X X X X X X Extracts X X X X ..... there would have been nothing left entitling the assessee for deduction in terms of clause (b) of Explanation (iii) of section 115JA(2) of the Act. Since nothing is left after setting off brought forward business loss up to 1994-95 against profit, the assessee is not entitled to any relief under clause (b) of Explanation (iii) to section 115JA of the Act. - Decided in favor of revenue. - 1003 of 2009 - - - Dated:- 25-5-2010 - RAMACHANDRAN NAIR C. N., GOPINATHAN P. S., JJ. JUDGMENT C. N. Ramachandran Nair J.- 1. This is an appeal filed by the Revenue against the order of the Tribunal reversing a rectification order passed under section 154 by the Assessing Officer confirmed in first appeal against the respondent-assessee. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for the year 1995-96 was nil, there was only a brought forward unabsorbed depreciation of Rs.4,83,87,788 and so much so, the Assessing Officer noticed that the claim originally allowed was in violation of clause (b) of Explanation (iii) of section 115JA because the said section require availability of brought for- ward business loss as well as depreciation. In view of this mistake, in the original computation, the Assessing Officer rectified the assessment under section 154 of the Act. Against the rectification carried out, the assessee filed first appeal before the Commissioner of Income-tax (Appeals), who dismissed the case, both on the jurisdictional aspect as well as on the merits. However, the assessee succeeded in second appeal befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computation of book profit, both should be available as per the accounts of the assessee. When original assessment is completed without reference to the statutory provision and in clear violation of the same, such assessment happens to be a mistake, that could be rectified under section 154 of the Act. We, therefore, answer this question in favour of the Revenue by reversing the finding of the Tribunal and by holding that rectification carried out is valid. 5. The next question is on the merits of the case where the issue is only a factual one, that is, whether the assessee had brought forward business loss as well as depreciation in the end of the previous year. According to the assessee, depreciation is lesser when compared to the bro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off against the profit, then the balance brought forward business loss available will be nil because, the profit available during 1995-96 was Rs.11,71,61,492. We do not know on what basis the Tribunal allowed the brought forward business loss to be bifurcated with the figure available up to the end of 1994-95 and permitted the assessee to set off only the loss up to that year retaining a balance of Rs. 3,40,00,000 towards balance brought forward business loss. In our view, the FIFO method of setting off applies only when more than one year's brought forward business loss or unabsorbed depreciation are set off against profit available in later years. Since the profit for 1995-96 was such as to absorb the entire brought forward business loss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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