TMI Blog2012 (5) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... under dispute filed its return showing nil income after claiming deduction u/s 115JB(2)(i) of an amount of ₹ 115,07,00,000/- being the interest waived by different banks and financial institutions credited to P L account as provision for interest written back. While completing the assessment, the AO did not dispute the fact that the banks and financial institutions have waived interest amounting to ₹ 115,07,00,000/- as one time settlement and the assessee has credited the aforesaid amount waived in its P L A/c during the relevant assessment year. The AO however observing that an amount of ₹ 109,77,59,000/- out of total amount of interest waived was actually paid by the assessee in the earlier years allowed the differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, interest paid/disallowed under section 43B of the Act, interest allowed on payment or funding etc. From the aforesaid information furnished in a tabular form reproduced in para 7.2 of the CIT (A) s order the CIT (A) found that the total interest debited by the assessee from assessment years 1997-98 to 2003-04 was to the tune of ₹ 131.18 crores. After adjusting the actual interest paid in cash of ₹ 27.38 crores an interest amount of ₹ 107.87 crores remained outstanding to banks and lying in the books of accounts as provision on 31-3-2005. In view of the aforesaid facts and figures, the CIT (A) found the conclusion of the AO that the assessee has paid interest amounting to ₹ 109.77 crores factually incorrect. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unting to ₹ 107.80 crores actually remained outstanding in the books of the assessee at the time of waiver of interest by the banks under OTS. For ready reference, the relevant portion is extracted hereunder from the order of the CIT (A). 7.4 Thus, it can be inferred that an amount of ₹ 107.80 crores is actually outstanding to banks and lying in the books of accounts as provision as on 31-3-2005 as clearly demonstrated by the appellant with the help of balance-sheets and the same amount has been written off by the banks, as verified from and confirmed from OTS letters. Thus the AO s finding in the assessment order that interest to the tune of ₹ 109.77 crores was paid is found to be factually incorrect. This interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the assessment order that initially the AO had worked out unabsorbed depreciation at ₹ 20,90,48,386/- and business loss at ₹ 7,24,93,410/- and has allowed ₹ 7,24,93,410/- being the lesser of the two as deduction under Explanation-III to section 115JB(2) of the Act. However, in the course of appeal proceedings before the CIT (A), the AO in his remand report has re-worked the brought forward loss at ₹ 54.92 crores and unabsorbed depreciation at ₹ 28.67 crores. From a plain reading of section 1154JB(2) of the Act, it is clear that lesser amount between the brought forward loss and unabsorbed depreciation has to be allowed as deduction. In the present case, since unabsorbed depreciation has been worked out by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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