Global Vectra Helicorp Ltd. Vs DCIT (ITAT Delhi)
Conclusion: Tribunal restored the matter of AO’s disallowance, which was deemed inconsistent with Section 115JB by directing assessee’s claim of deduction for computing book profit under Section 115JB required fresh verification in the light of the Chart furnished by assessee, which had been reproduced in the order.
Held: Assessee was a resident corporate entity, stated to be engaged in the business of flying, operating, letting on hire, lease and charter hire of helicopters and providing aviation services in respect of helicopters. For the assessment year under dispute, assessee filed its return of income on 30.11.2015 declaring NIL income under the normal provisions of the Act and book-profit of Rs.10,72, 11,670/- under Section 115JB. In course of assessment proceedings, while examining the book-profit computed by assessee, AO noticed that assessee had reduced an amount of Rs.43,60,42,388/-, being the lower of the brought forward loss or unabsorbed depreciation, in terms of clause (iii) under Explanation 1 to section 115JB. Assessee had stated that the deduction had been incorrectly computed and the correct figure of deduction should be Rs. 51,20,83,841/-. In this context, the assessee furnished a detailed working of deduction. However, while completing the assessment, AO was of the view that the figure of brought forward loss and unabsorbed deprecation were required to be considered separately, independent of each other, and after reducing current year’s profit by the lesser of the two for the purpose of carry forward to the next year, the closing balance of the immediately preceding year was required to be treated as opening balance of the succeeding year. Accordingly, AO recomputed the lower of brought forward loss or unabsorbed depreciation and allowed deduction for an amount of Rs.32,29,19,988/- in terms of clause (iii) of Explanation 1 to section 115JB. The difference arose on account of miscalculation by AO and there was no legal basis to reconsider the additions/deductions made by assessee in its return of income for preceding years while calculating book profits for the current year as per Section 115JB. It was held that assessee’s claim of deduction for computing book profit under Section 115JB required fresh verification in the light of the Chart furnished by assessee, which had been reproduced in the order. Accordingly, the issue was restored back to AO for fresh adjudication after factually verifying assessee’s claim by referring to the Chart. It was also directed that AO must provide reasonable opportunity of being heard before deciding the issue.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
Captioned appeals, one by the assessee and rest by the Revenue, arise out of separate orders of learned Commissioner of Income-tax (Appeals) pertaining to assessment years 2011-12, 2012-13, 2013-14, 2014-15, 2015-16 and 2016-17. Since, the issues are common in all these appeals and facts relating to such issues arising in the appeals are more or less identical, they have been clubbed together and disposed of in a consolidated order, for the sake of convenience.
ITA No.1397/Del/2020 (Assessee’s Appeal)
AY: 2015-16
2. The dispute in the present appeal is confined to computation of book profit under section 115JB of Income-tax Act, 1961 (in short ‘the Act’).
3. Briefly the facts are, the assessee, a resident corporate entity, is stated to be engaged in the business of flying, operating, letting on hire, lease and charter hire of helicopters and providing aviation services in respect of helicopters. For the assessment year under dispute, the assessee filed its return of income on 30.11.2015 declaring NIL income under the normal provisions of the Act and book-profit of Rs.10,72,11,670/- under section 115JB of the Act. In course of assessment proceedings, while examining the book-profit computed by the assessee, the Assessing Officer noticed that the assessee has reduced an amount of Rs.43,60,42,388/-, being the lower of the brought forward loss or unabsorbed depreciation, in terms of clause (iii) under Explanation 1 to section 115JB of the Act. Noticing this, the Assessing Officer called upon the assessee to furnish a detailed working. In response, the assessee furnished its reply, stating that the deduction has been incorrectly computed and the correct figure of deduction should be Rs. 51,20,83,841/-. In this context, the assessee furnished a detailed working of deduction. However, while completing the assessment, the Assessing Officer was of the view that the figure of brought forward loss and unabsorbed deprecation were required to be considered separately, independent of each other, and after reducing current year’s profit by the lesser of the two for the purpose of carry forward to the next year, the closing balance of the immediately preceding year was required to be treated as opening balance of the succeeding year. Accordingly, the Assessing Officer recomputed the lower of brought forward loss or unabsorbed depreciation and allowed deduction for an amount of Rs.32,29,19,988/- in terms of clause (iii) of Explanation 1 to section 115JB of the Act. While deciding assessee’s appeal on the issue, learned Commissioner (Appeals) did not interfere.
4. Before us, learned counsel appearing for the assessee submitted that the difference between the revised deduction claimed by the assessee of Rs.51,20,83,841/- and the deduction allowed by the Assessing Officer of Rs. 32,29,19,988/- is Rs.18,91,63,853/-. He submitted, the differential figure of Rs. 18,91,63,853/- comprises of following:
