9911796707
TMI Blog2023 (3) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... challenged the computation of adjustment allowable in terms of clause (iii) of Explanation-1 to Section 115JB(2) for computation of book profits made by the Assessing Officer resulting in lower adjustment to the extent of Rs.93,06,502/-. 3. When the matter was called for hearing, the ld. counsel for the assessee submitted that; (i) the assessee furnished its return of income computing total income under normal provisions of the Act. Likewise, book profit under Section 115JB was also computed at Nil. In the course of the assessment proceedings, the book profit was re-determined by the assessee at Rs.1,10,12,730/-. The Assessing Officer computed the tax liability on such book profits accordingly. (ii) In the first appeal, the assessee co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01,27,590) (22,18,04,962) (24,94,34,092) 5.4. In the above working, book profits has been adjusted by Rs.93,06,502/- being the business loss for the F.Y. 2009-10 on the ground that u/s 115JB under Explanation 1 to clause (iii), the Book Profit can be reduced by the amount of loss brought forward or unabsorbed depreciation whichever is less as per books of accounts. Based on the above said working, the appellant has contended that the amount of loss brought forward or the unabsorbed depreciation whichever is less should be allowed for working of the Book Profit computation. In this manner a sum of Rs.93,06,502/- is reduced from the Book Profit computation for the assessment year under consideration. From the working, it is evident that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d then it will be allowed loss brought forward or depreciation whichever is less. In a financial year, if there is a loss after depreciation but after excluding depreciation, it results into profit, that profit has to be aggregated and set off against the brought forward losses and the resultant loss will be available to the assessee for the next year. Applying the provision to the facts of the appellant, it is clear that the profit for the F.Y. 2010-11 (A.Y. 2011-12) before depreciation and amortization of Rs.17,19,98,265/- is available against which the brought forward losses are to be set off. In case, if there are any further losses available after the set off, the same has to be compared with the depreciation and lesser of the two will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the other hand has separated the total depreciation of Rs.39.38 crore as unabsorbed depreciation and taken the remaining amount of Rs.17,19,98,268/-, i.e., [Book loss 22,18,04,962 (-) unabsorbed depreciation 399803227] as business loss. Such methodology has ultimately resulted in Nil business loss vis-à-vis an unabsorbed depreciation of Rs.41,21,25,855/- as against the total unabsorbed depreciation loss of Rs.24,01,27,590/- and business loss of Rs.93,06,502/- computed by the assessee. The ld. counsel thus submits that the ld. CIT(A) has wrongly computed the amount of unabsorbed depreciation and business loss for the Financial Year 2010-11 opposed to the intendment of the provision of Section 115JB resulting in the present anamoly. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sorbed" before the word depreciation. The word 'unabsorbed' would be rendered redundant, if the view of revenue is endorsed. 7.2 Regarding the term "unabsorbed depreciation" we may also refer to provisions of section 32(2) of the Act governing the carry forward and set off of unabsorbed depreciation. The same is reproduced below: "(2) Where, in the assessment of the assessee, full effect cannot be given to any allowance under sub-section (1) in any previous year, owing to there being no profits or gains chargeable for that previous year, or owing to the profits or gains chargeable being less than the allowance, then, subject to the provisions of sub-section (2) of section 72 and sub-section (3) of section 73, the allowance or the part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 98265 (A)-(B) Thus, total loss of Rs.22,18,04,962/- represent unabsorbed depreciation after part absorption against such profits (393803227 - 171998265) Total 24,01,27,590 93,06,502 Total b/f loss (excluding depreciation) is less than total unabsorbed depreciation. 9. Similarly, the adjustment entitled to the assessee against the book profit as determined by the CIT(A) is reproduced herein: CIT(A) working Years Total Unabsorbed Depreciation (Profit)/Loss [excluding depreciation Remarks As on 1.4.2009 Profit (1,01,94,143) Opening profit after absorbing Depreciation as on 01.04.2009 F.Y. 2009-10 1,83,22,628 Loss 1,95,00,645 Total book loss for FY 200910 of Rs.3,78,23,273/- include both book loss (excluding ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
