| The Tax Publishers2020 TaxPub(DT) 2534 (Ahd-Trib) INCOME TAX ACT, 1961
Section 115JB
Amount of accumulated profit shown by assessee in previous year 2010-11 having already suffered tax under normal computation of income, same profit could not be made subject to tax again under provisions of MAT. Accordingly, amount of losses incurred by assessee for previous year(s) 2012-13 and 2011-12 should be set off against the future income in the manner as specified under section 115JB and thus assessee rightly reduced the amount of income for the year under consideration from the brought forward losses/unabsorbed depreciation pertaining to previous year(s) 2012-13 and 2011-12.
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MAT - Computation of book profit under section 115JB - -
Assessee in the year under consideration has shown net profit in its financial statement prepared under Companies Act amounting to Rs. 63 lakhs. While computing book profit under section 115JB, assessee reduced the same by the amount of unabsorbed depreciation/brought forward losses in pursuance to clause (iii) to section 115JB. However, AO took the view that there was no unabsorbed depreciation/brought forward losses in the financial statement. Therefore, the amount of profit for the concerned year could not be reduced by either of two as the case might be. Accordingly, AO determined book profit at Rs. 63 lakhs and computed MAT liability under section 115JB accordingly. Held: As per clause (iii) of Explanation 1 to section 115JB, assessee can claim deduction either of brought forward losses or unabsorbed depreciation whichever is less as per books of accounts. Admittedly, on making reference to financial statement, there was no brought forward loss or unabsorbed depreciation despite the fact that there was loss in immediate preceding two years amounting to Rs. 5,04,27,204 (Previous year 2012-13) and Rs. 3,74,46,497 (Previous year 2011-12) respectively. As such the said losses were set off against accumulated profit shown by assessee in previous year 2010-11. Admittedly, amount of accumulated profit shown by assessee in previous year 2010-11 had already suffered tax under normal computation of income and therefore, same profit could not be made subject to tax again under provisions of MAT. Accordingly, amount of losses incurred by assessee for previous year(s) 2012-13 and 2011-12 should be set off against the future income in the manner as specified under section 115JB and thus assessee rightly reduced the amount of income for the year under consideration from the brought forward losses/unabsorbed depreciation pertaining to previous year(s) 2012-13 and 2011-12.
Supported by:CIT v. Sumi Motherson Innovative Engg. Ltd. (2011) 336 ITR 321 (Delhi-HC) : 2010 TaxPub(DT) 2302 (Del-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2014-15
IN THE ITAT, AHMEDABAD BENCH
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