TMI Blog2011 (8) TMI 1146X X X X Extracts X X X X X X X X Extracts X X X X ..... umulative figures. 2. The facts of the case are that in this case assessment order u/s 143(3) of the IT Act was passed on 29-12-2006 determining the total income at nil. The AO observed that there was a mistake in computing the income u/s 115JB of the IT Act. The assessee had claimed set off of lower of brought forward loss or unabsorbed depreciation after aggregating the amount of brought forward loss and unabsorbed depreciation whereas the claim should have been lower or the brought forward loss or unabsorbed depreciation of each year without any aggregation. Since, it was found to be mistake apparent on record, the AO initiated proceedings u/s 154 of the IT Act. The assessee submitted reply before the AO in the rectification procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed CIT(A) that the issue involves long drawn process of interpretation of provisions of section 115JB of the IT Act, therefore, the AO was having no jurisdiction to pass order u/s 154 of the IT Act and relied upon the decision of the Hon ble Supreme Court in the case of Volkart Bros. reported in 82 ITR. The assessee also submitted on merit that the issue is covered by the decision of ITAT, Mumbai Bench in the case of Amline Textiles (P) Ltd. 27 SOT 152. 3. The learned CIT(A) considering the issue held that the issue is covered by the order of the ITAT Mumbai Bench in the case of Amline Textiles (P) Ltd. (supra) as well as the issue is highly debatable, therefore, the AO should not have passed the rectification order. The same was cancele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion we are of the considered opinion that the lower of the solitary figures of the unabsorbed depreciation or losses brought forward for all the earlier years taken together, is to be reduced for the purpose of computing book profit under section 115 JB. Before reaching the above conclusion, 1TAT discussed the issue from all perspective. Apart from stressing on the language used in the provision, reference to section 71 to 73 was also made and it is held that loss as per books will be different than unabsorbed losses allowable for carried forward. Since the aforesaid order is quite reasoned and there is no judicial decision supporting the AO's action, the year wise calculation to arrive at the figure of unabsorbed depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to Explanation (iii) to section 115JB (2) of the IT Act the amount of loss brought forward or unabsorbed depreciation whichever is less as per the books of accounts shall have to be considered by the AO while completing the assessment. The same provision was taken into consideration while finalizing the assessment. The AO at the rectification stage had taken different interpretation of this provision in order to pass order u/s 154 of the IT Act. Therefore, the learned CIT(A) rightly held that the issue is debatable and the conclusion could be drawn after long drawn discussions. There was no mistake apparent on record; therefore, on a debatable issue the proceedings u/s 154 of the IT Act would not be valid. The learned DR merely relied u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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