TMI Blog2017 (12) TMI 1046X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. Commissioner of Income tax noticed that the accounts of the assessee did not show any brought forward loss/depreciation. Accordingly he took the view that the AO had wrongly allowed the claim for deduction of brought forward loss/depreciation. Hence, he revised the assessment order u/s. 263 of the Act. Consequent thereto, the present assessment order was passed by the Assessing Officer wherein he determined the book profit u/s. 115JB of the Act at ₹ 27.78 lakhs by rejecting the claim for deduction of brought forward loss/depreciation. 3. The facts relating to this issue requires further elaboration. The assessee had accumulated losses of ₹ 5.58 crores and equity share capital of ₹ 7.00 crores in the past. In vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tative (DR) submitted that the book profit u/s. 115JB of the Act has to be computed from the financial statements prepared as per the provisions of Companies Act. He submitted that the assessee had set off the brought forward losses against share capital way back in 2003 itself and hence the balance sheet of the year under consideration did not show any brought forward losses/depreciation. In the absence of any brought forward losses/depreciation in the financial statements, there is no scope for the assessee to seek deduction of a nonexistent figure. 7. Having heard rival submissions, we are of the view that there is merit in the contentions of the ld. DR. In the case of Surat Textile Mills Ltd. vs. DCIT (supra), the all credit balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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