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2016 (6) TMI 525 - AT - Income TaxDisallowance of deduction of alleged accumulated unabsorbed depreciation of earlier years while computing the book profit for the purpose of section 115JB - Held that:- CIT(A) failed to justify why a different stand has been taken in this assessment year, where in the previous two assessment years, consistently, the AO has allowed reduction of unabsorbed loss/depreciation under clause (iii) of Explanation to section 115JB while calculating the book profit. In the Asstt.Year 2010-11, the AO has granted reduction. The order of the AO was sought to be revised by the ld.Commissioner by exercise of power under section 263 of the Act. However, the conclusions of the ld.Commissioner did not get approval from the Tribunal, and that order has been set aside. The assessment order in Asstt.Year 2010-11 has been restored. Considering all these factors in their setting as a whole, we are of the view that 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 amounting to ₹ 27,36,90,817/- 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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