TaxTMI 
TaxTMI 
2020 (2) TMI 780
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..../- u/s. 115JB of the Act. The case was selected for scrutiny. The scrutiny assessment was completed u/s.143(3) r.w.s. 144C(13) of the Act on 21/10/2011 assessing loss at Rs. 10,50,86,086/- under normal provisions of the Act and book profit of Rs. 10,65,68,701/- u/s.115JB of the Act. This assessment was framed pursuant to the directions of the ld. Dispute Resolution Panel-II Mumbai (ld. DRP). In the said assessment, the ld. AO had adjusted the brought forward loss as per books of accounts of the assessee at Rs. 6,77,29,000/- and determined the book profit of the assessee at Rs. 10,65,68,701/-. Later this assessment was sought to be revised by the ld. Administrative CIT on the ground that there were errors in the adjustment of brought forward losses with the book profits while computing the income u/s.115 JB of the Act. The assessee furnished the entire details of cash loss as well as depreciation loss as per its books of accounts for all the earlier years and the manner in which the same was sought to be set off by it while filing the return of income against the book profits u/s.115JB of the Act. The assessee pleaded with the ld. CIT that the ld. AO had consciously applied his mind....
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....deprecation or book loss brought forward from earlier years, yet for the purposes of quantification of carry forward of unabsorbed book loss and book depredation to the next assessment year, the assessee has the option to reduce from the current year's profit, either the book loss or the book depreciation, irrespective of which one is lower. 7. In the instant case, the assessee company has been arriving at the amount of brought forward book loss and depreciation by reducing/setting off the profit of the year against the brought book loss and unabsorbed depreciation proportionately. 8. As stated earlier and as will be evident from the computation forwarded herewith the method adopted by the assessee for quantification and/ or carry forword of brought forward book loss/ unabsorbed book depreciation has been followed by it consistently and the method so adopted has been accepted too by the Income-tax Appellate Tribunal vide its Order dated 16 March 2011 passed for the Assessment Year 2004-05. 9. Accordingly, in terms of the working of brought forward book loss and unabsorbed depreciation forwarded herewith, an amount of Rs. 6,77,29,000/- being lower of the b....
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....k depreciation to the nest assessment year, the assessee has the option to reduce from the current year's profit, cither the book loss or the buck depreciation on proportionate basis, irrespective of" which one is lower, has basis in la\v and therefore, is rejected. The contention of the assessee that the said method adopted by the assesses has been upheld by ITAT for AY 2004-03 is factually incorrect. Perusal of the said decision indicates that the ITAT has adjudicated on the issue of quantum of business loss or unabsorbed depreciation to be considered for reduction from book profit as per clause (iii) of Explanation] 1 to section 115JB. The assessing officer had rejected the above mentioned method of carry forward adopted by the assessee and worked out the correct position of carry forward business loss and unabsorbed depreciation as per the provisions of the income Tax act,1961. However .for the purpose of clause (iii of Explanation 1) to section 115JB the assessing officer considered the lower of unabsorbed loss and depreciation separately for each year and then made cumulative total of all such lower figure to arrive at the quantum of unabsorbed loss/depreciation ....
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.... 0 123048 146795 349127 0 0 349127 2003-04 329331 146795 0 146795 0 349127 0 0 349127 2004-05 334033 0 0 0 0 349127 0 0 349127 2005-06 0 0 0 0 349127 160845 0 509972 2006-07 161224 0 0 509972 3.6. Based on the aforesaid table, the ld. CIT finally concluded that the aggregate amount of unabsorbed business loss brought forward to AY 2007-08 is Rs.NIL and the aggregate amount of unabsorbed depreciation brought forward to AY 2007-08 is Rs. 50,99,72.000/-. Accordingly, the provision of clause (iii) of Explanation (1) to section 115JB is not applicable as the amount of loss brought forward is Nil. Therefore, assessee is not eligible for any reduction as per clause (iii) of Explanation (1) to section 115JB of the Act. But assessee has claimed reduction of Rs. 6,77,29,000/- under clause (iiii) of Explanation(1) to section 115JB for the purpose of computation of book profit. The assessing officer has allowed the above claim of the assessee without verifying the allowability of the same and this action of the....
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....spute. We find that the assessee during the year of set off had sought to adjust the least of business loss or depreciation loss as per books of accounts on a proportionate basis with the business loss as well as with the depreciation loss instead of reducing the least of the entire business loss or depreciation loss as per books of accounts. This is the short dispute before us. We find the manner of set off of brought forward losses as per books of accounts either on year to year basis or on cumulative basis or on proportionate basis has not been spelt out anywhere in the provisions Section 115JB of the Act. Only the courts have interpreted the manner of set off of losses and had accordingly held that the same had to be done based on the least of accumulated figure of business loss or depreciation loss as per books of accounts. The fact of manner of set off of losses not being specified in provisions of Section 115JB of the Act is also accepted by the revenue in the written submissions filed before us dated 24/04/2017 which is also placed on record. We find that Clause (iii) of Explanation 1 to Section 115JB of the Act merely provides for determination of the amount which is requi....
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....ooks at Rs. 15,01,82,00/-. Thus, the matter related to the interpretation of the effect which is to be given to the aforesaid provision and, therefore, it was not a mistake which was to be corrected for which jurisdiction under Section 154 of the Act could be exercised, as held by the Apex Court in Apollo Tyres Vs. Commissioner of Income Tax, 255 ITR 273 and T.S. Balaram Income Tax Officer, Company Circle IV, Bombay Vs. M/s Volkart Brothers, 82 ITR 50. 7. We, thus do not find any merits in these appeals. No question of law arises. These appeals are accordingly dismissed." 5.1. Though the aforesaid decision was rendered in the context of Section 154 of the Act by the Hon'ble Delhi High Court, the analogy drawn thereon could very well be applied to the impugned proceedings u/s.263 of the Act as the underlying principle based on which the Hon'ble Delhi High Court rejected the plea of the revenue was that a possible view has been taken by the ld. AO and the issue in dispute before the Hon'ble Delhi High court was a debatable issue and hence, would not fall within the ambit of mistake apparent on record within the meaning u/s.154 of the Act. The same analogy would certainly ....