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TMI Blog2010 (9) TMI 1139X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions covered under cl. (c) of Expln. 1 to s. 115JB(2) of the Act. 3. On appeal before the learned CIT(A) it was submitted that the adjustment for the purpose of determination of book profit has not been made in accordance with law. The provision for gratuity and leave encashment has been made on actuarial basis. The learned CIT(A) while allowing the relief observed that the provision for gratuity was allowable as deduction in view of decision of jurisdictional High Court in the case of DCM Shri Ram Consolidated Ltd. He accordingly directed to delete the adjustment made in respect of provision for gratuity. Similarly for asst. yr. 2006-07 the learned CIT(A) allowed the appeal in favour of the assessee. 4. Before us, the learned senior Departmental Representative supported the order of the AO. On the other hand, the learned Authorized Representative of the assessee submitted that provision for gratuity and leave encashment was made on actuarial basis and, therefore, no adjustment could be made in respect of provision for gratuity and leave encashment for the purpose of computation of book profit under s. 115JB of the Act. He placed reliance on the decision of Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t off of only ₹ 535.03 lakhs as mentioned in tax audit report. The contention of the assessee in this regard is that as per provisions of law for the purpose of book profit the AO ought to have adopted the figure of business loss or depreciation as per books of accounts and not as per tax audit report for the purposes of income-tax. 7. We have considered the rival submissions. We find that under cl. (iii) of Explanation to s. 115JB(2) of the Act the profit as per P L a/c for the relevant previous year is to be reduced by an amount of loss brought forward or unabsorbed depreciation as per books of accounts, whichever is lower. Hence, the provisions of law are very clear that brought forward business loss or unabsorbed depreciation as per books of accounts has to be reduced and not the business loss or depreciation as per tax audit report. Therefore, the learned CIT(A) was justified in directing the AO to adopt the figure of loss available to the assessee as per the report of the chartered accountant given in Form No. 29B. Accordingly, we do not find any infirmity in the order passed by the learned CIT(A) deleting the addition. 8. The grounds of appeal raised in the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evious year 2004-05 the assessee company claimed to have paid a sum of ₹ 136.10 lakhs to ICICI/IFCI and had not claimed this amount in the original return of income because it had already been claimed by DCM Ltd. in 2002-03. The appeal by DCM Ltd. before the learned CIT(A) in respect of the said claim had been rejected and the issue agitated by DCM Ltd. before the Tribunal was still pending. The AO further noted that provisions of s. 43B of the Act have been amended and Explns. 3C and 3D had been inserted to provide that conversion of interest into loan shall not be deemed to be actual payment for the purpose of s. 43B of the Act. The above Explanation was inserted by Finance Act, 2006 with retrospective effect from 1st April, 1989. In view of the amendment in law the assessee company claimed deduction under s. 43B of the Act of the amount of unpaid interest of ₹ 136.10 lakhs, which was paid to financial institutions during the year under consideration and was claimed in revised computation of income. An undertaking was filed by DCM Ltd. to withdraw its ground of appeal before the Tribunal in respect of its claim of ₹ 17.59 crores as and when the above appeal woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. vs. CIT (supra). On the other hand, the learned senior Departmental Representative supported the order of the learned CIT(A). 12. We have heard both the parties and gone through the material available on record. As seen from the facts the AO had disallowed the claim of the assessee mainly on the ground that the claim was neither made in the original return of income nor was the revised return filed and, therefore, the same could not be allowed. Hon'ble Supreme Court in the case of Goetze (India) Ltd. vs. CIT (supra) has held that the AO had no power to entertain the claim otherwise than by way of revised return. However, it was clarified that the decision was restricted to the powers of the assessing authority to entertain the claim for deduction otherwise than by a revised return and did not impinge upon the powers of the Tribunal under s. 254 of the IT Act, 1961. In view of the decision of Hon'ble Supreme Court, we are of the considered view that this matter should be sent back to the AO with a direction to examine the claim of the assessee with regard to the allowability of claim under s. 43B in respect of interest of ₹ 136.10 lakhs paid by the assessee to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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