2021 (6) TMI 127

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.... filed its return of income declaring Nil income after adjustment of brought forward losses of earlier years. The assessment was completed u/s.143(3) on 14-03-2016 determining total income at Rs. 54,42,770/- by making disallowance u/s.40(a)(ia) and also not allowing deduction u/s.80IA(4). The assessee preferred appeal before the ld. CIT(A), who, vide his order dated 23-12-2016 deleted the disallowance u/s.40(a)(ia) and also held the assessee eligible for benefit of section 80IA(4), thereby again computing the total income at Nil. The ld. PCIT, exercising power u/s.263 of the Act, came to hold the assessment order to be erroneous and prejudicial to the interest of Revenue on the ground that the Assessing Officer (AO) failed to apply section ....

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....h computation showing Nil difference in income under both the scenarios has been placed on record. 5. The case of the assessee is that the amount of brought forward business loss would reduce `book profit' under section 115JB as under the normal computation of income. In this regard, we find that computation of 'book profit' has been dealt with in Explanation 1 to section 115JB. Clause (iii) of Explanation 1 specifically provides : "that the amount of loss brought forward or unabsorbed depreciation whichever is less as per the books of accounts shall be reduced from the amount of profit as per the profit and loss account in the computation of book profit". The ld. PCIT has noted in the impugned order that the amount of unabsorbed depreci....