TMI Blog2018 (6) TMI 1777X X X X Extracts X X X X X X X X Extracts X X X X ..... India P. Ltd. [ 2011 (3) TMI 267 - DELHI HIGH COURT] that under these facts, it cannot be said that there was an apparent mistake which could be rectified by invoking the provisions of section 154 of IT Act. Hence, by respectfully following this judgement of Hon ble Delhi High Court, we decide the issue in favour of the assessee. - ITA No. 509/Bang/2016 - - - Dated:- 15-6-2018 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER For the Appellant : Shri S. Ramasubramanian, CA For the Respondent : Smt. Padma Meenakshi, JCIT (DR) ORDER Per Shri A.K. Garodia, Accountant Member This appeal is filed by the assessee and the same is directed against the order of ld. CIT(A)-3, Bangalore dated 01.01.2016 for Assessment Year 2007-08. 2. The grounds raised by the assessee are as under. 1. That the order of the learned Commissioner of Income Tax (Appeals) in so far it is prejudicial to the interests of the appellant is bad and erroneous in law and against the facts and circumstances the case. 2. That the learned Commissioner of Income Tax (Appeals) erred in law and on facts in disallowing the set-off of carried forwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As against this, the ld. DR of revenue supported the orders of authorities below. She drawn our attention to page no. 12 of the paper book filed by the assessee being page no. 2 of the order passed by the AO u/s. 154 of IT Act and it was pointed out that a clear finding is given by AO that as per the assessment records for the Assessment Year 2006-07, it is revealed that while computing the income u/s. 115JB, the entire depreciation loss of ₹ 3,37,17,625/- being the least of business loss and depreciation loss as per books of accounts was adjusted against the book profit and income of ₹ 1,37,25,650/- was assessed u/s. 115JB in that year. But for Assessment Year 2007-08, while computing the income u/s. 115JB, the depreciation loss as per accounts to the extent of ₹ 1,94,76,156/- was claimed as set off but since the depreciation loss as per books of accounts were set off of in Assessment Year 2006-07 and it has become Nil after such set of in that year, the same should have been adopted against the book profit of Assessment Year 2007-08. Therefore there was apparent mistake in the assessment order which has been rectified by the AO. She submitted that there is no in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsorbed depreciation of ₹ 1,39,36,000/- was rightly brought forward and adjusted in this year. The CIT (A), however, dismissed the appeal of the assessee. Aggrieved by this order, the assessee preferred second appeal before the ITAT. The Tribunal has accepted the contention of the assessee and held that the adjustment made by the AO 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 under which the adjustment of ₹ 1,39,36,000 was made against the profits in the assessment year 2000-01. He has pointed out that in the immediate previous year i.e. in the assessment year 1999-2000, there were profits and the return was filed under the normal provisions and not under Section 115 JA of the Act. At the same time, there were unabsorbed losses and unabsorbed depreciation of previous year which were carried forward to this year. He has clarified that in so far a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,39,36,000 (ii) Brought Forward Business Loss (excluding depreciation) ₹ 14,21,44,000 MAT COMPUTATION DONE BY ASSESSEE Profit as per Profit and Loss Account ₹ 58,98,000 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 Rs. (80,38,000) 5. On this basis it was claimed that in the next assessment year, the Assessing Officer has rightly corrected the error under Section 154 of the Act by setting off ₹ 80,38,600 instead of ₹ 1,39,36,000/. This plea of Mr. Sahni is not correct. Mr. Sahni has only picked up the MAT computation done by the assessee in that year but knowing the fact that in that year the assessee had earned profits and actually it was only brought forward business loss of the previous year which was adjusted and unabsorbed depreciation of ₹ 1,39,36,000/- remained as it is without any adjustment. The manner in which the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 (viii) Business Losses (excluding depreciation) to be carried forward ₹ 11,19,46,319* *[₹ 12,39,45,496-₹ 1,19,99,177] ...................... Aggregate Loss ₹ 12,58,82,319 7. From the above paras reproduced from this judgement of Hon ble Delhi High Court, we find that in that case also, the issue in dispute was similar as to whether the amount brought forward as unabsorbed depreciation as claimed by the assessee is correct or not. In that case also, this was the claim of the assessee that the profits of the assessment year 1999-2000 were set off against the carried forward losses of the previous year which were more than 15 crores rupees and even after absorbing the entire profits of the year 1999- 2000, against the carried forward losses, losses still remained unabsorbed and the unabsorbed depreciation was not even touched. The claim in the present case is also similar. In that case also, this was the claim of the revenue before Hon ble Delhi High Court that that in Assessment Year 1999-2000, profit as per P L account of ₹ 58.98 lakhs was adjusted against unabsorbed depreciation and brought forward business loss and therefore, the AO took ..... 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