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2015 (8) TMI 1094 - AT - Income TaxManner in which brought forward business loss and unabsorbed depreciation is to be dealt with under MAT provisions - Held that:- According to the provisions of section 115JB Explanation 1 Clause (iii) while computing book profit, the amount of loss brought forward (before depreciation) or unabsorbed depreciation, whichever is less (as per books of account), shall be reduced from net profit. In the present case, the issue involved is identical. We do not find any infirmity in the order of Commissioner of Income Tax (Appeals) for assessment year 2008-09 in allowing the claim of the assessee in the light of order of Tribunal rendered in the case of Kirloskar Ferrous Industries Ltd. Vs. Addl. CIT (2011 (11) TMI 633 - ITAT PUNE). After perusal of the order of the Tribunal, we also find that Ruling in the case of Rashtriya Ispat Nigam Ltd. (2006 (7) TMI 656 - AUTHORITY FOR ADVANCE RULINGS) was considered by the Co-ordinate Bench. We concur with the findings of the order of Commissioner of Income Tax (Appeals) in assessment year 2008-09 in directing the Assessing Officer to calculate book profits in accordance with the method detailed by the Tribunal in aforesaid case. Accordingly, the appeal of Revenue is dismissed. Disallowance made u/s. 14A r. W. Rule 8D - Held that:- Assessee in its return of income did not make any disallowance with respect to exempt income. The stand of assessee is that no expenditure was incurred for earning tax free income. However, the Assessing Officer made disallowance of ₹ 1,48,820/- without assigning cogent reasons. The burden lies on the Assessing Officer to prove the nexus between the expenditure to be disallowed and non-taxable income. The Assessing Officer cannot simply brush aside the claim of assessee, in respect of disallowance u/s. 14A of the Act. The Assessing Officer has not refuted the claim of assessee that there was direct credit of dividend through ECS and no interest bearing funds were utilized for making investment. A perusal of assessment order shows that the Assessing Officer has mechanically applied the provisions of Rule 8D without giving reasons for rejecting the assertions for making no disallowance by the assessee. Thus the disallowance made u/s. 14A r. W. Rule 8D is deleted. - Decided in favour of assessee. MAT provisions - Whether the profits of Bangalore and Pune units that have been merged with the assessee company are to consider for the purpose of computation of book profits u/s. 115JB? - Held that:- As per Clause 31 the scheme is to be effective on complying with two conditions, i. E. (i) Sanction of scheme by BIFR and (ii) Filing of certified copy of order of BIFR with Registrar of Companies (ROC), Kanpur and Mumbai. The assessee has placed on record a copy of challan/receipt to show that the BIFR order was filed with ROC on 07-11-2008. Thus, from the analysis of the above it is evident that both the conditions as set out in Scheme of Arrangement were complied on 07-11-2008, therefore, scheme of arrangement was to be implemented w. E. F. 07-11-2008. Therefore, by no stretch of imagination the profits of amalgamating units could have been included in financial year ending on 31-03-2008. Thus the authorities below have erred in including profits of Bangalore and Pune units while computing book profits u/s. 115JB for the period relevant to assessment year 2008-09. Accordingly, we accept the second ground of appeal of the assessee. - Decided in favour of assessee.
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