TaxTMI 
TaxTMI 
2020 (6) TMI 200
X X X X Extracts X X X X
X X X X Extracts X X X X
....9.2012 on following substantial questions of law: (i) Whether on the facts and in the circumstances of the case, the honourable tribunal was right in law in not allowing deduction of brought forward loss or unabsorbed depreciation relating to non-STPI units in computing book profits under Section 115JB? (ii) Whether on the facts and in the circumstances of the case, the honourable tribunal was right in law in adjusting the past profits of the STPI units from the brought forward loss or unabsorbed depreciation relating to non-STPI units and thus not allowing reduction of the brought forward loss or unabsorbed depreciation relating to non-STPI units while computing the book profits under Section 115JB? (iii) Whether on the facts and in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s held that no amount of brought forward loss has to be reduced in the computation of income. It was further held that in computation of income under Section 115JB of the Act, a sum of Rs. 8,44,51,767/- being unabsorbed depreciation claimed in the audit report in Form No.29B does not deserve to be reduced. Accordingly, the book profit of Rs. 21,14,42,000/- was adopted by not giving the benefit of deduction of unabsorbed depreciation amounting to Rs. 8,44,51,767/-. 3. Being aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) by an order dated 27.08.2010, inter alia held that when there is a loss shown in the books of accounts, it has to be considered and there is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that loss brought forward and unabsorbed depreciation has to be taken as per books of accounts and not as per balance sheet. It is further submitted that tribunal ought to have reduced the lower of the brought forward loss and unabsorbed depreciation as per books of account relating to non 10A unit while arriving at book profit for the purposes of Section 115JB of the Act. While inviting the attention of this court to Section 10A as well as Section 115JB it is submitted that from the various adjustments mentioned in explanation-1, two adjustments with reference to Section 10A are evident viz., clause (f) of Section 115JB, which seeks to increase the net profit by the amount of expenditure relatable to any income to Section 10A applies and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....HINDUSTAN UNILEVER LTD. VS. DCIT', (2010) 325 ITR 102, ' CIT V. PAHARPUR COLLING TOWERS (P) LTD.', (1996) 219 ITR 618 (SC), 'SRI.VENKATESHWARA TOURIST HOME (P) LTD.', (1996) 219 ITR 618 (SC), 'SRI.VENKATESHWARA TOURIST HOME (P) LTD. V. ADIT (INVESTIGATION)', (1998) 233 ITR 0736 (KARN.), 'CIT VS. HARPRASAD AND CO PVT. LTD.,', (1975) 99 ITR 118 (SC), 'APOLLO TYRES LTD. VS. CIT', (2002) 255 ITR 273 (SC), 'VARGHESE (K.P) VS. ITO', (1981) 131 ITR 597 (SC), 'CIT VS. VEGETABLE PRODUCTS LTD.,', (1973) 88 ITR 192 (SC). 6. On the other hand, learned counsel for the revenue has supported the order passed by the tribunal and has invited our attention to the decision of the supreme court in 'APOLLO TYRES LTD. VS. COMMISSIONER OF INCOME-TAX', (2002) 122....
X X X X Extracts X X X X
X X X X Extracts X X X X
....which makes the company liable to pay tax on atleast 30% of its book profits as shown in its accounts. For the aforesaid purpose, Section 115J makes the income reflected in the companies books of account as the deemed income for the purposes of assessing the tax. It has also been held that sub-Section (1A) of Section 115J does not empower the assessing officer to embark upon a fresh enquiry with regard to the entries made in the books of accounts of the company. The said sub-Section mandates the company to maintain its account in accordance with the provisions of Companies Act. Section 115JB was inserted in the Act by Finance Act, 2000 with effect from 01.04.2001. Explanation-(1) to Second proviso to Section 115JB(1) provides that for the p....