Case Law Details
Go Airlines (India) Limited Vs DCIT (ITAT Mumbai)
We are concerned with the computation of book profits u/s.115JB of the Act wherein one of the items eligible for reduction would be the lower of brought forward cash loss or brought forward depreciation loss as per books of accounts. We find that provisions of Sections 32(2) and 72 of the Act explicitly provide that the amount would be carried forward for set off in the succeeding years and it should be arrived at after deducting the amounts to which effect has already been given. We find that such provisions are apparently not present in computing the book profits u/s.115JB of the Act. We find that what is contemplated in Clause (iii) of Explanation 1 to Section 115JB of the Act is the simple numerical figure being the amount of loss brought forward or unabsorbed depreciation whichever is less. Hence, it could be safely concluded that it is a simple determination of numerical amount which would be eligible for reduction from net profit for the purposes of arriving at the book profit u/s.115JB of the Act. We also find that most crucial expression used in the said Clause (iii) of Explanation 1 to Section 115JB of the Act would be “as per books of accounts”. Hence, unless the entire loss as per books of accounts gets wiped out by profits earned in subsequent years, the said loss would continue to remain in the balance sheet of the assessee i.e. “books of accounts” and would be eligible for reduction in accordance with Clause (iii) of Explanation 1 to Section 115JB of the Act, while computing book profits u/s.115JB of the Act.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal in ITA No.3788/Mum/2018 for A.Y.2014-15 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-10, Mumbai in appeal No.CIT(A)-10/DC-5(1)(1)/390/16-17 dated 20/02/2018 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 23/12/2016 by the ld. DCIT 5(1)(1), Mumbai (hereinafter referred to as ld. AO).
2. The first issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in upholding the action of the ld. AO in denying the adjustment in book profit by not giving deduction towards unabsorbed depreciation amounting to Rs.8,48,95,742/- on the ground that the same has already been adjusted in the preceding years.
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Hi,
Does that mean, if the losses are adjusted in the earlier years the same can be adjusted again if the loss continues in the books of accounts?