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2008 (11) TMI 438 - AT - Income TaxMAT - Computation of book profit u/s11 5JB - Aggregate amount of loss brought forward or unabsorbed depreciation - Assessee’s claim is that it is the aggregate amount of loss brought forward or unabsorbed depreciation relating to the earlier years which should be considered for the purpose of deducting from the net profit as per profit & loss account - revenue is contending that the brought forward losses as well as unabsorbed depreciation in respect of each year is to be separately examined and allowed - CIT(A) restricted the deduction under clause (iii) of Explanation (1) to section 115JB to unabsorbed depreciation as against claimed by the appellant. HELD THAT:- When clause (iii) of Explanation (1) clearly states that ‘the amount of loss brought forward or unabsorbed depreciation, which is less as per books of account’ is liable to be reduced, in our considered opinion, there is no authority for falling upon the command of section 72 for holding that the business loss is to be considered on year to year basis and not as an aggregate figure for all years in unison. To put it simply the amount of loss brought forward or unabsorbed depreciation has to be considered for as many years as coming in the books of account irrespective of any rider for a particular number of years. We, therefore, hold that reference to the provisions of sections 71 to 73 for arriving at the conclusion that section 115JB refers to year-wise consideration of the loss brought forward or unabsorbed depreciation, is erroneous. We are of the considered opinion that the lower of the solitary figures of the unabsorbed depreciation or loss brought forward for all the earlier years taken together, is to be reduced for the purposes of computing "book profit" u/s 115JB. As the aggregate amount of unabsorbed depreciation in respect of the four years which is lower than the aggregate of the loss before depreciation. in our considered opinion, the assessee had rightly claimed reduction for the lower amount. We, therefore, accept the assessee’s contention on this point. In the result, the appeal is allowed.
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