TaxTMI 
TaxTMI 
2008 (6) TMI 377
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....on P&M @ 25 per cent of Rs. 39,268 i.e., Rs. 9,817. Hence the depreciation claimed as per Income-tax Rules at Rs. 35,39,436 will be allowed at Rs. 35,29,619 (35,39,436-9,817)." 3. Before the CIT(A) the assessee placed reliance on the decision of Mumbai Tribunal in the case of Gujarat Ambuja Cements Ltd. v. Asstt. CIT [2005] 4 SOT 59 wherein identical issue was stated to have been dealt with by the Tribunal and it was held that once preoperative expenses having direct or indirect nexus with setting up of business or installation of machinery can be capitalised, then there is no reason why they are not entitled for depreciation as per rules. Specific reference was made to the following observations of Tribunal from the said decision : "Finally so long as the charging of depreciation in pre-operative period and bringing it back by capitalization does not increase the actual cost, there cannot be any objection to this accounting. Even otherwise, actual cost of "assisting asset" installed in pre-operative period are eligible for claim of depreciation in post-operative period. In view of the above, we hold that the assessee is entitled to depreciation as per rules or the capitalised va....
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....profit and gains shown in the Profit & Loss Account. Reference was also made to the decision of Bombay Tribunal in the case of Dy. CIT v. Gobind Rubber (P.) Ltd. [2004] 89 ITD 457 in which it was held that it is not the actual deduction under section 80HHC which is relevant, but what is relevant is eligible profit for deduction under section 80HHC for the purposes of MAT computation. Similarly, reliance was placed on the decision of ITAT in the case of Starchik Specialities Ltd. v. Dy. CIT [2004] 90 ITD 34 (Hyd.) and also the decision of ITAT in the case of Smruthi Organics Ltd. v. Dy. CIT [2006] 101 ITD 205 (Pune) relying on these decisions the ld. CIT(A) has held that the amount of Rs. 32,50,760 could not be replaced by the Assessing Officer by a sum of Rs. 4,90,103 while computing book profit under section 115JB. The Revenue is aggrieved, hence in appeal. 9. The ld. DR relying on the order of the Assessing Officer pleaded that the computation made by the Assessing Officer of book profit should be upheld. 10. On the other hand, ld. AR has produced before us the order of the Tribunal in the case of the Moser Baer India Ltd. v. Dy. CIT [2007] 17 SOT 510 (Delhi) wherein similar is....
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....account for such financial year or part of such financial year falling within the relevant previous year. Explanation. -For the purposes of this section, "book profit" means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2), as increased by- (a )the amount of income-tax paid or payable, and the provision therefor; or (b )the amounts carried to any reserves, by whatever name called, other than a reserve specified under section 33AC; or (c )the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; or (d )the amount by way of provision for losses of subsidiary companies; or (e )the amount or amounts of dividends paid or proposed ; or (f )the amount or amounts of expenditure relatable to any income to which section 10 (other than the provisions contained in clause (38) thereof) or section 10A or section 10B or section 11 or section 12 apply; or (g )the amount of depreciation, if any amount referred to in clauses (a) to (g) is debited to the profit and loss account, and as reduced by- (i )the amount withdrawn from any reserve or provision (excluding a reserv....
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....ar commencing on and from the assessment year relevant to the previous year in which the said company has become a sick industrial company under sub-section (1) of section 17 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) and ending with the assessment year during which the entire net worth of such company becomes equal to or exceeds the accumulated losses. Explanation.-For the purposes of this clause, "net worth" shall have the meaning assigned to it in clause (ga) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986). (3) Nothing contained in sub-section (1) shall affect the determination of the amounts in relation to the relevant previous year to be carried forward to the subsequent year or years under the provisions of sub-section (2) of section 32 or sub-section (3) of section 32A or clause (ii) of sub-section (1) of section 72 or section 73 or section 74 or sub-section (3) of section 74A. (4) Every company to which this section applies, shall furnish a report in the prescribed form from an accountant as defined in the Explanation below sub-section (2) of section 288, certifying that the book....