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TMI Blog2021 (7) TMI 946X X X X Extracts X X X X X X X X Extracts X X X X ..... en extracted by the AO. AO has calculated the unabsorbed depreciation and business forward losses and the CIT(A) has confirmed the order of the AO. At the time of hearing, the assessee has also produced before us a statement showing the details of unabsorbed depreciation and accumulated losses. Figures are not in consonance with each other as calculated by the AR of the assessee. Therefore, to find out the genuineness of the figures which are extracted as above, we remit this issue to the file of the AO for verification/genuineness of the figures as quoted supra in the table by the ld. AR of the assessee. If the figures are found to be correct, the AO is directed to allow the claim of the assessee u/s 115JB(2)(iii) in accordance with law after providing reasonable opportunity of being heard to the assessee. Thus, the grounds raised by the assessee on this issue in both the appeals under consideration are treated as allowed for statistical purposes. - ITA No. 1281/H/2017, ITA Nos. 1040 & 1041/H/2017 - - - Dated:- 22-7-2021 - Shri Satbeer Singh Godara, Judicial Member And Laxmi Prasad Sahu, Accountant Member For the Assessee : Shri Narayanamurthy For the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d hence rectification order dated 25.03.2015 is invalid. It is also argued that the proposal to reduce interest is not mistake apparent from record as the attribution of delay is a debatable Issue and hence would not come under purview of section 154. Assessee in support of Its arguments relied on the decisions of Birla Corporation Ltd., (66 Taxmann.com 276), DBS Bank (66 Taxmann.com 173), Otis Elevators Ltd (60 Taxmann.com 272), Nathpa Jhakri JV (36 Taxmann.com 45), wherein it was held that the delay is attributable to whom is a debatable issue and hence the same is out of scope of section 154. It is also argued that section 244A does not mandate that the claim of TDS should be made only in the return. It is further submitted the delay is not attributable to the assessee as the department gives credit to the TDS only when reflected in 26AS. The updation of Form 26AS is beyond the control of the assessee and hence the delay in updation should not be attributed to the assessee. 4. After considering the submissions of the assessee, the CIT(A) directed the AO to allow interest u/s 244A as was allowed in the earlier 154 order for the full period by observing as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment years were erroneous and prejudicial to the interest of revenue insofar as the carry forward and set off of losses for the purposes of section 115JB had wrongly allowed. Commissioner of Income Tax(Central), therefore, set aside both the assessment orders with a direction to Assessing Officer to re-examine the issue relating to carry forward and set off of losses and pass appropriate assessment orders and re-compute book profits accordingly. The present assessment orders under appeal were passed in consequence of above referred 263 order. 9.1 During the reassessment proceedings, the AO asked the assessee to furnish details of brought forward business losses and unabsorbed depreciation from AY 1997-98 to 2003-04. After submitting the details, which were extracted by the CIT(A) at page 2 of his order, the assessee submitted that there is brought forward business loss of ₹ 16,61,40,1321/- and unabsorbed depreciation of ₹ 20,46,47,066/- It is claimed that as per the Provisions of 115JB book profit has to be reduced by amount of brought forward loss or unabsorbed depreciation whichever is less Therefore, in the case of the assessee, the brought forward business l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that as on 01.04.2003 the assessee had total loss of ₹ 37,07,87,214/- which comprises of depreciation of ₹ 13,47,78,042/- and business loss of ₹ 23,60,09,172/-. As the brought forward business loss being lower than the depreciation, it is claimed that the Assessing Officer rightly reduced the depreciation of ₹ 2,49,01,778/- and ₹ 14,76,30,052/- for AY 2004 05 and 2005-06 respectively. 9.4 Assessing Officer, after considering this information held that the assessee as at 31/03/1996 had total loss of ₹ 27,25,78,636/ (comprising depreciation of 6.75,73,922/- and business loss of ₹ 20,50,04,714/-). As the assessee in its books of account had profit of ₹ 37,02,38,167/- as on 01.04.1005 the loss of 1995-96 (amounting to ₹ 27,25,713,636/-) was absorbed with the surplus of earlier years. The assessee therefore transferred ₹ 3,02,00,000/- and ₹ 61,83,487/- to general reserves account and dividend payable account respectively. Even after these transfers there was a net surplus of ₹ 6,72,76,044/- as on 31.03.1996. During the F.Y. 1996-97 assessee incurred total loss of ₹ 22,28,76,497/- which was absorbed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,49,01,778/- and ₹ 35,99,09,089/- for AYs 2004-05 and 2005-06 respectively. 10. Aggrieved by the order of AO, the assessee preferred appeals before the CIT(A) and contended that the set off given originally by the Assessing Officer was in accordance with law and as per the decision of Hon'ble Mumbai Tribunal in Amline case (supra) and hence the same should be upheld. It is thus, submitted that 115JB calculation made by the Assessing Officer in the present orders under appeal should be held to be incorrect and accordingly cancelled. 11. After considering the submissions of the assessee, the CIT(A) confirmed the order of AO by observing as under: 7.3 I have considered the arguments of the assessee and have gone through the calculation of losses as submitted by the assessee and as arrived at by the AO. I have also carefully gone through the decisions of ITAT in case of Amline Textiles and Kerby Building Systems. It is also seen that the CIT(C) in the order u/s 263 dated 25/03/2014 held that the set off of losses as done by the AO for Ay 2004-05 and 2005-06 is erroneous and prejudicial to the interests of revenue. This order is accepted by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e., calculation of loss after excluding the depreciation. Therefore, I do not find any inconsistency in the calculation of loss arrived at by the Assessing Officer and hence uphold the same Thus, the calculation of the book profits by Assessing Officer u/s. 115JB at ₹ 2,49,0,118/- and ₹ 35,99,08,089/- for A.Y. 2004-05 and 2005-06 respectively is confirmed. 12. Aggrieved by the order of CIT(A), the assessee is in appeal before the ITAT for both the years under consideration by raising the following grounds of appeal: 1. The order of the learned Commissioner of Income-tax ( Appeals) is erroneous in law and on the facts of the case. 2. On the facts and in the circumstances of the case, the learned Commissioner of Income-tax ( Appeals) erred in confirming the methodology adopted by the Assessing Officer in arriving at the book profit liable for tax u/s 115JB. 3. The learned Commissioner of Income-tax ( Appeals) erred in considering loss or depreciation on cumulative basis for all the years put together rather than arriving at brought forwards unabsorbed depreciation or loss composed in the opening balance of loss as at 01.04.2003. 4. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d accumulated losses, which is as under: Particulars AY During the year Set off During the year Carried forward Accumulated Depreciation Loss/profit Depreciation Loss Depreciation Loss Depreciation Loss 1997-98 94070453 0 - - 94070453 - 94070453 - 1998-99 149549838 236009172 - - 149549838 236009172 243620291 236009172 1999-2000 129252448 (216515273) 129252448 87262825 - -87262825 243620291 ..... 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