Sungroup Enterprises (P) Ltd Vs DCIT (ITAT Delhi)
ITAT Delhi held that as per the MAT provisions of section 115JB of the Income Tax Act the lower of book losses or unabsorbed depreciation can be set off against book profits. Accordingly, order of CIT(A) upheld and appeal of assessee dismissed.
Facts- The assessee is engaged in the business of providing investment advisory/management consultancy services to its clients. The case was selected for scrutiny and assessment u/s. 147 of the Income-tax Act, 1961 read with section 143(3) was completed by the AO on 30.12.2017 assessing the deemed total income at Rs.85,75,056/- u/s 115JB of the Act by making the total adjustment of brought forward losses and unabsorbed depreciation. CIT(A) partly allowed the appeal of the assessee. However, being aggrieved, assessee has preferred the present appeal.
Conclusion- ITAT, Ahmedabad Bench in the case of M/s. Milan Intermediates LLP vs. ITO ITA No.209/Ahd./2018 dated 26.07.2018 and the issue raised before them was relating to determining the quantum of brought forward unabsorbed loss and unabsorbed depreciation eligible for reduction from the profits in the tax computation u/s 115JB and it was held that the tax payer had not option to choose that profits or preceding years would first be adjusted against the brought forward business loss and lastly, against the unabsorbed depreciation. In this regard, it was held that if the lower of two happens to be unabsorbed depreciation, the profit should have been reduced from the unabsorbed depreciation and not from the unabsorbed loss.
