TaxTMI 
TaxTMI 
2011 (11) TMI 633
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....y the assessee which could help in verifying that the total expenditure debited under this head has been incurred wholly and exclusively for the purpose of business. Similarly, the Assessing Officer made an ad hoc disallowance of ₹ 2,00,000/- as non-business expenditure out of telephone expenses of ₹ 16,18,529/- after observing that no separate telephone call register or any other such record has been maintained by the assessee. 4. In appeal, the Commissioner of Income-tax (Appeals) held as under: "The submission has been considered and is found to be partly acceptable. So far as disallowances out of vehicle expenses and telephone expenses are concerned, I find it difficult to find fault with the action of the AO because considering the nature of these facilities, their use for on business purposes cannot be ruled out and therefore, his action of making part disallowances under these heads is held to be justified. However, the disallowances of ₹ 2 lakhs out of telephone expenses of ₹ 16,18,529/- appears to be on a higher side and, therefore, the same is reduced and restricted to ₹ 1 lakh only." Being aggrieved with the order of the Commissioner of I....
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....t material or evidence. Against this order of the Commissioner of Income-tax (Appeals), the assessee is in further appeal before us. 9. We have carefully considered the rival submissions. We find that this issue stands concluded in favour of the assessee and against the Revenue by the judgment of the Hon'ble Bombay High Court in the assessee's own case (supra), wherein the Hon'ble High Court held as under: "3. As regards the question Nos ii and iii are concerned, the Tribunal relying upon its decision in th case of Kirloskar Pneumatic Co. in ITA No 6/PN/07 for the AY 2003-04 held that even if the expenditure is incurred in the year but the demand is raised and accepted in the subsequent year, then the expenditure would be allowable in the subsequent year. We see no infirmity in the above order passed by ITAT. Accordingly, appeal is dismissed." Respectfully following the aforesaid judgment of the Hon'ble jurisdictional High Court in the assessee's own case, we set aside the order of the Commissioner of Income-tax (Appeals) and the Assessing Officer is directed to delete the disallowance made on this count. This Ground of appeal is thus allowed. 10. The last Ground pertains to ....
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....ssioner of Income-tax (Appeals), the assessee filed detailed written submissions. However, the Commissioner of Income-tax (Appeals) held that the Assessing Officer was justified in rejecting the assessee's method of adjustment of carried forward book losses and depreciation for MAT purposes. Being aggrieved with this decision of the Commissioner of Income-tax (Appeals), assessee is in further appeal before us. 12 Before us, the learned Counsel for the assessee has submitted that the Assessing Officer has disallowed assessee's methodology for adjustment of carried forward book losses and depreciation for the purposes of computing Minimum Alternative Tax (MAT) under section 115JB of the Act. It is pointed out that there is no specific method prescribed under the statute to adjust carried forward book loss and depreciation as provided for in Clause (iii) of Explanation below section 115JB(2) of the Act. It is submitted that in so far as assessee is concerned, it computed carried forward book losses and depreciation after adjusting the same on First in First out (FIFO) basis against the profits available in the past years. It is pointed out that in so far as the Assessing Officer is c....
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.... is not applicable where the amount of loss brought forward or unabsorbed depreciation is nil. In the background of the aforesaid, now we may first examine the computation of book profit made by the assessee in the return of income. The net profit as per Profit & Loss Account adopted by the assessee was ₹ 20,76,31,798/-. While computing the liability under section 115JB, assessee, inter alia, claimed an adjustment of ₹ 35,72,28,867/- in terms of aforesaid clause (iii) of Explanation below 115JB of the Act. In this manner, the book profit for the purposes of 115JB(2) was determined at 'Nil'. The claim of the assessee was based on the hereinafter mentioned workings. As on 1.4.2005, the aggregate of carried forward losses and depreciation after netting of the profits for intermittent years was detailed as under: Financial Year Profit Loss Depreciation 1994-95 3,15,54,669 1995-96 7,03,62,878 1996-97 8,44,03,032 8,97,39,166 1997-98 9,11,09,266 10,58,61,822 1998-99 28,05,39,414 11,57,42,667 1999-00 8,08,79,470 11,57,42,667 2000-01 21,99,52,999 11,93,65,159 2001-02 5,74,86,634 11,84,38,447 2002-03 2,97,02,890 2002-03 20,38,22,257 2003-04 31,71,5....
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....04 was only ₹ 56,66,54,975/-. Thereafter, the Assessing Officer applied clause (iii) of Explanation 1 for the assessment year 2003-04 to the instant year, i. e. assessment year 2005-06 in the following manner.: "For A.Y. 2003-04 Net Profits to the audited Profit & Loss A/c. (as per para 3.9 above) ₹ 23,35,25,147/- Less: i) B/f. business loss of ₹ 81,43,70,815/- (ii) unabsorbed depreciation ₹ 56,66,54,975/- (as per para 3.8 above) whichever is less ₹ 56,66,54,975/- Book Profits/Loss (-) ₹ 33,31,29,828/- Amounts to be carried forward to AY 2004-05 Business loss ₹ 81,43,70,815/- Unabsorbed depreciation (Rs 56,66,54,975 - 23,35,25,147) ₹ 33,31,29,828/- For A.Y 2004-05 Net Profits to the audited Profit & Loss A/c. ₹ 31,71,55,566/- Less: i) B/f. business loss of ₹ 81,43,70,815/- (ii) unabsorbed depreciation ₹ 33,31,29,828/- whichever is less ₹ 33,31,29,828/- Book Profits/Loss (-) ₹ 1,59,74,262/- Amounts to be carried forward to AY 2005-06 Business loss ₹ 81,43,70,815/- Unabsorbed depreciation (Rs 33,31,29,828 - 31,71,55,566) ₹ 1,59,74,262/- A.Y. 2005-06 Net Profits to the a....