Case Law Details
Peerless Hospitex Hospital & Research Centre Ltd. Vs DCIT (ITAT Kolkata)
Conclusion: While computing book profit u/s 115JB, assessee company was entitled, to deduct the B/F business losses as the restriction, contained in Sec.72 of the I.T. Act on carrying forward the unabsorbed business losses for more than 8 years, did not apply in computing the Adjusted Book Profit u/s 115JB.
Held: In return of income filed by assessee company for A.Y. 2009-10, it had claimed deduction of Rs. 2,95,24,869/- in computation of MAT u/s 115JB, on verification of records it was seen that the amount claimed by assessee was related to the loss brought forward or unabsorbed depreciation for A.Y. 1996-97, 1997-98, 1998-99. As the unabsorbed loss arose more than 8 years back, therefore the claim of the assessee was not accepted by AO. It was held that section 115-JB was a stand-alone provision which did not contain any provision about carry forward of B/F losses, while computing the Book Profit u/s 115-JB. Audited accounts of the company clearly suggested that assessee had never adjusted the brought forward losses/debit balance of Profit and Loss account with the General Reserve. In view of the above, it was clear that the sum of Rs. 18,69,57,957/-credited in the General Reserve account was a Capital Receipt hence, it should not to be considered in computation of book profit u/s 115JB. AO had failed to take into account that the restriction, contained in Sec.72 of the I.T. Act on carrying forward the unabsorbed business losses for more than 8 years, did not apply in computing the Adjusted Book Profit u/s 115JB. Therefore, AO was directed to allow the claim of the assessee for adjusting the unabsorbed losses of Rs.2,95,24,689/- with the book profits under section 115-JB of the Act, for the year.
FULL TEXT OF THE ITAT JUDGEMENT
The captioned two appeals filed by the assessee, pertaining to assessment years 2009-10 and 2013-14, are directed against the separate orders passed by the learned Commissioner of Income Tax (Appeals)-4, Kolkata (in short the ld. ‘CIT(A)’], in appeal No. 525/CIT(A)-4/C-11/(2)/2015-16 and 1369/CIT(A)-4/C11(2)/15-16, which in turn arise out of separate assessment orders passed by the Assessing Officer u/s 154/ 251/ 143(3) of the Income Tax Act, 1961 ( in short the ‘Act’).
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