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TMI Blog2014 (5) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... lypropylene compounds and other allied products. Assessee filed its return of income for A.Y. 06-07 on 29.12.2006 declaring total loss of Rs. 95,40,985/-. The assessment was framed under section 143(3) read with 147 of the Act vide order dated 30.12.2009 and the book profit under section 115JB was assessed at Rs. 1,50,66,867/-. Aggrieved by the order of A.O, Assessee carried the matter before CIT(A). CIT(A) vide order dated 27.09.2010 partly allowed the appeal of the Assessee. Aggrieved by the order of CIT(A), the Assessee is now in appeal before us. 1. On the facts and circumstances of the case the learned CIT(A) has erred in confirming assessment of book profits of 1,50,66,867/- under section 115JB of the Act by learned Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st further in the A.Y.2006-07. In this circumstances the AO disallowed the adjustment of unabsorbed depreciation for computing the Book Profits u/s. 115JB for the A.Y.2006-07. On the other hand the appellant has contended that the Book Profit computed at Nil by the appellant after setting off of Rs. 1,68,16,794/- is order and as per the law. The appellant furnished the details of carry forward position as under to buttress the arguments before me. From the table above, it is clear that F.Y. ending on 31-03-2001/02/03 & 05, the appellant had normal profits and the brought forward loss or depreciation was nil. In the year ending 31.03.2004, there was normal loss of Rs. 20,264/- only and there was no carry forward unabsorbed depreciation. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an amount which is equal to the amount provided for depreciation for that year or those years whichever is less: It is this very concept, which was incorporated in s. 115J of the I.T. Act under Explanation, which states that for the purpose of s. 115 J,. "book profit" means the net profit as shown in the P & L A/c. for the relevant previous year and as reduced by cls. 1 to 4, Under s. 205 of Companies Act this methodology was prescribed so that the dividend distribution did not erode capital of the concerned company and the concept was incorporated in s. 115J for the same purpose i.e. the payment of MAT would not adversely affect the capital of the concerned company under this deeming provision. In this circumstances it is necessary to exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orward or unabsorbed depreciation is reduced to nil. This view was affirmed by the Hon'ble AAR in the case of Rastriya Ispat Nigam Ltd. IN RE, 285 ITR 1 (AAR). Further for the purpose of s. 115JB, the 'brought forward loss and unabsorbed depreciation are required to be depicted separately, independent of each other and after the current year's profit is reduced by the lesser of the two for the purpose of carry forward to the next year, the closing balance of the immediate preceding year would be the opening balance for the succeeding year. There can be several parallel streams of accounting, each of them independently following its own accounting and legal parameters prescribed by the respective statutes. Sec. 115JB(s) gives sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (P) Ltd vs. ACIT 100 ITD 379 (Asr.), the Hon'ble ITAT, Amritsar, held that "assessee's business loss being nil, unabsorbed depreciation was not allowable in computing the book profits in view of the sec. 115JB(2), Expl. (iii), as substituted by Finance Act, 2002 w.e.f. 1st April,2001". In view of this, I am convinced that the AO has rightly observed that the record of AY 2005-06 shows that the appellant had shown net profit of Rs,. 3,76,84,545/- and after claiming unabsorbed depreciation of Rs. 1,67,16,794/-, leaving no amount to be carried forward for next year. Considering the factual matrix of the case. I do not inclined to interfere in the finding of the AO. In my opinion, the appellant had not only furnished the inaccurate pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. 8. We have heard the rival submissions and perused the material on record. Before us, the ld. A.R. has furnished a statement showing brought forward losses and unabsorbed depreciation from earlier years and the working of amount that can be set off for the purpose of Section 115JB. He also submitted the break up of depreciation and losses to be carry forward. We are of the view that the statement submitted by Assessee needs to be examined from the records of assessment and therefore the issue needs to be remitted to the file of A.O for his examination and verification. We therefore remit the issue to the file of A.O for examining the statement submitted by Assessee and thereafter decide the issue in accordance with law. Assessee is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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