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2017 (12) TMI 1046 - AT - Income TaxNot allowing deduction of brought-forward losses/depreciation while computing book profit u/s. 115JB - Held that:- In the case of Surat Textile Mills Ltd. vs. DCIT (2016 (6) TMI 525 - ITAT AHMEDABAD) the all credit balances were accumulated and transferred to “Rehabilitation Scheme Account” and the profit and loss account was adjusted against the same as per Scheme approved by BIFR for re-habilitation of the assessee under Sick Industries Act. Such adjustments were not made as per the requirements of Companies Act. That fact weighed in favour of the assessee. In the instant case the assessee itself has filed petition before the Hon'ble High Court of Bombay for reduction of share capital by adjusting accumulated losses as per the provisions of Companies Act. After receipt of approval from the Hon'ble Bombay High Court, the assessee has wiped off the accumulated losses by transferring it to Equity Share capital, thereby reducing the Share capital account. As submitted by the ld. DR all these transactions have happened way back in 2003. All these adjustments have been carried out as per the provisions of Companies Act and after such adjustment; there would not be any accumulated loss as contended by the assessee. We are concerned with determination of book profit for assessment year 2010-11. Admittedly the financial statement prepared for the year under consideration does not contain any entry towards “accumulated losses”. As stated earlier, there does not exist any accumulated loss in the eyes of law after giving effect to the order passed by Hon’ble Bombay High Court for capital reduction. For these reasons, we are of the view that the ld. CIT(A) was justified in upholding the order of AO in rejecting the claim of the assessee
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