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2019 (5) TMI 1757 - AT - Income TaxDisallowing of benefit of brought forward unabsorbed depreciation while calculating the income under section 115 JB - adjustment of the brought forward loss/ unabsorbed depreciation against the reduction of share capital treated as set off against the reduction in the share capital - whether the assessee can claim the set off unabsorbed depreciation which has already been adjusted against the capital reduction of the company in a scheme approved by the Hon’ble Gujarat High Court? - set off of the unabsorbed depreciation, which already adjusted against the reduction of share capital, against the business profit of the current year - HELD THAT:- As decided in case of Surat Textile Ltd [2016 (6) TMI 525 - ITAT AHMEDABAD] restructuring credits brought by the assessee to the profit & loss account against accumulated profit and loss/debit balance, while giving effect to the scheme sanctioned by the BIFR would not extinguish alleged loss and depreciation from the accounts of the assessee in actual terms. Such loss would be available to the assessee as per the accounts prepared under Part-II and III of Schedule-VI, and the assessee will be entitled to claim reduction of loss/unabsorbed depreciation, whichever is lower, from the book profit under clause (iii) of Explanation to Section 115JB, while making such computation for the purpose of section 115JB. We allow the appeal of the assessee and set aside the orders of the Revenue authorities on this issue. We direct the ld.AO to grant deduction of unabsorbed depreciation from the book profit under clause (iii) of Explanation to Section 115JB(2) of the Income Tax Act, 1961. - Decided in favour of assessee
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