TMI Blog2011 (3) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 and 657 of 2010 - - - Dated:- 25-3-2011 - SIKRI A. K., MEHTA M. L. JJ JUDGMENT A. K. Sikri J.- 1. In both these appeals the issue involved is identical. These appeals pertain to the same assessee and the issue which has cropped up relate to the assessment years 2000-01 and 2001-02. For the sake of convenience, we may take note of the facts which appear in I. T. A. No. 97 of 2009 as that appeal relates to the prior assessment year, namely, assessment year 2000-01. 2. The assessee had filed income-tax return showing losses. Since losses under the normal provisions were much higher than the loss computed as per the book profit under section 115JA of the Income-tax Act, 1961 (hereinafter referred to as the Act ), this return was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,000 was rightly brought forward and adjusted in this year. The Commissioner of Income-tax (Appeals), however, dismissed the appeal of the assessee. Aggrieved by this order, the assessee preferred second appeal before the Income-tax Appellate Tribunal. The Tribunal has accepted the contention of the assessee and held that the adjustment made by the Assessing Officer for the intimation issued under section 143(1) of the Act by way of a rectification order in respect of unabsorbed depreciation was beyond the scope of section 154 of the Act. Thus, the Assessing Officer had no power to take recourse to the provisions of section 154 of the Act. 3. Mr. Vohra, learned counsel for the respondent-assessee has pointed out the circumstances und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oing so, the Assessing Officer has treated Rs. 1,39,36,000 as unabsorbed depreciation to be set off against the profits earned in the year 1999-2000 and after setting off those profits, he has assumed that the carried forward depreciation would be Rs. 80,38,600. It is on this basis, it is argued that it is not an error apparent on the face of record and rather it depends on the interpretation that has to be given to clause (iii) of the Explanation to section 115JA(2) of the Act and such an exercise was not permissible under section 154 of the Act. Furthermore, it is argued, it amounts to even disturbing the assessment in respect of the assessment year 1999-2000 which could not be done even while making regular assessment of the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forward business loss of the previous year which was adjusted and unabsorbed depreciation of Rs. 1,39,36,000 remained as it is without any adjustment. The manner in which the computation was done in the assessment years 1999-2000, 2000-01 and 2001-02 is reproduced below which would clearly demonstrate that the unabsorbed depreciation was in fact Rs.1,39,36,000 which was allowed to be set off in the assessment year 2000-01 while passing the original assessment order : Assessment year 1999-2000 as on 1.4.1998 (as per books) Rs. (i) unabsorbed depreciation 1,39,36,000 (ii) brought forward business loss (excluding depreciation) 14,21,44,000 mat computation done by assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,19,99,177 Less : Lower of unabsorbed depreciation and brought forward business loss (1,39,36,000) [As per Explanation (ii) of the second proviso to section 115JA(2)] Book profit (19,36,823) As on 31-3-2001 (vii) Unabsorbed depreciation 1,39,36,000 (viii) Business losses (excluding depreciation) to be carried forward 11,19,46,319 *[Rs. 12,39,45,496 - Rs. 1,19,99,177] Aggregate loss 12,58,82,319 6. When this is the position and the assessments were done in this manner it could not be stated that there was an error which could be corrected by invoking the provisions of section 154 of the Act. The assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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