PVR PICTURES LTD., NEW DELHI V. DCIT, CIRCLE- 19(2), NEW DELHI

ITA 3843/DEL/2017

AI Insights

The case involves M/s. PVR Pictures Ltd., the appellant, contesting the order of the CIT (A)-VII, New Delhi, which arose from an assessment order passed by the Assessing Officer under Section 143(3) of the Income Tax Act for the Assessment Year 2012-13. The primary issue was the computation of adjustments allowable under clause (iii) of Explanation-1 to Section 115JB(2) for the computation of book profits, specifically the adjustment of brought forward business losses and unabsorbed depreciation. The Tribunal examined the differences in the computation methods used by the assessee and the CIT (A) and found that the CIT (A)'s method led to an incorrect application of the law, resulting in the rejection of the assessee's claim for a lower adjustment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121640 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 21-02-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 12-06-2017
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 11; 15; 143(3); 115JB; 201; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F” DELHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI YOGESH KUMAR US, JUDICIAL MEMBER I.T.A. No.3843/DEL/2017 Assessment Year 2012-13 M/s. PVR Pictures Ltd., 1961, Basant Lok, Vasant Vihar, New Delhi. Vs. Dy.CIT, Circle-19(2), New Delhi. TAN/PAN: AACCP3746K (Appellant) (Respondent) Appellant by: Shri V.K. Garg, Adv. & Shri Parveen Kumar,CA Respondent by: Ms. Beenu, Sr.DR Date of hearing: 22 02 2023 Date of pronouncement: 10 03 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T he capt ione d a ppeal has bee n file d by t he assess ee a gain st the o rde r of the ld. C IT (A )-V II, N ew D elh i, da ted 29. 03. 20 17 ar isi ng from th e assess ment order da ted 28. 02.2 017 pa s sed b y the A ssessi ng O f fice r u/s. 143(3) of the A ct, conc erning A ssess ment Y ear 201 2-13. 2. A s per t he g rounds of ap peal, the assessee has cha l le nge d the c omp utat ion of adjustmen t allow a ble in te rms o f cla use (i ii) of Expla na tion-1 to S ect io n 115JB ( 2) for c ompu tat ion of boo k profi ts ma de b y the A ss es sing O ff ice r res ul ti ng in low er adjus t me nt to the extent of Rs. 93,0 6, 502/-. 3. When the matter w as calle d fo r hearin g, the ld. couns el for the ass essee s ubmi tte d t hat; I.T.As. No.3843/Del/2017 2 (i) the asses see fur nished its ret ur n of income computi ng total i nc ome under norma l provisi ons of th e A ct. L ik ew ise, book p rofit und er Section 115JB w a s als o c omput ed at N il. In t he c ourse of th e assess me nt proce edi ngs, the book prof it w as re-determin ed b y th e assess ee a t Rs. 1, 10, 12, 7 30/ -. The A ssessing O ff ic er computed t he ta x li abili t y on such bo ok profi ts acco rdi ngl y. (ii ) In th e f irst a ppe al, t he a ssesse e contende d t ha t it is ent itle d t o adj us t t he b ook profi t b y wa y of brou ght f orw ard loss or dep recia ti on as pe r book s of acc ount wh ic heve r is less i n t er ms of cla use (i ii ) of E xpla nati on- 1 to Se cti on 115JB (2) of t he Ac t. 4. In the first appea l, the ass essee r eiter ate d adjus t me nt of carr ie d forw ard bus i ness loss o r una bsor bed depr ec iat i on w hicheve r is low er, agains t ‘Book Pr ofi t ’ for the pur poses of Sect ion 115JB of the Ac t. The C IT ( A) obse rved that t he assessee is not enti tled to suc h adj ust me nt i n the facts of the case. The re le vant operative pa ra graph o f t he orde r of t he C IT( A) read s as under: 5 . 3 I h a v e c a r ef ul l y c on si d e r e d t he a s se s sm en t o rd er a n d w r it t e n su b m is s i o n f i l e d b y t h e L d . A R . T he ap p e l l an t h a s p r ov i de d a w or k i n g i n r e s pe c t o f B ook P r of i t u / s. 1 15 J B a s u n de r : P a r t i c u l a r s B / f o r w a r d L o s s w i t h o u t D e p & A m o r t i z a t i o n B o o k P r o f i t b e f o r e D e p D e p r e c t n . A m o r t i z a t i o n T o t a l o f U n a b s . D e p r e c t n a m o r t i z a t i o n a s o n d a t e N e t p r o f i t - L o s s T r s d . T o R e s e r v e & S u r p l u s ( L o s s ) / p r o f i t d u r i n g F . Y . 2 0 0 9 - 1 0 L e s s : O p e n i n g p r o f i t a s o n ( 1 , 9 5 , 0 0 , 6 4 5 ) 1 , 0 , 1 9 4 , 1 4 3 ( 8 , 4 8 , 6 4 6 ) - ( 8 , 4 8 , 6 4 6 ) ( 1 , 7 4 , 7 3 , 9 8 2 ) - ( 1 , 7 4 , 7 3 , 9 8 2 ) ( 1 , 8 3 , 2 2 , 6 2 8 ) - ( 1 , 8 3 , 2 2 , 6 2 8 ) ( 3 , 7 8 , 2 3 , 2 7 3 ) 1 , 0 1 , 9 4 , 1 4 3 ( 2 7 6 2 9 1 3 0 ) I.T.As. No.3843/Del/2017 3 0 1 . 0 4 . 2 0 0 9 B a l a n c e a s o n 3 1 . 0 3 . 2 0 1 0 ( 9 3 , 0 6 , 5 0 2 ) ( L o s s ) / p r o f i t d u r i n g F . Y . 2 0 1 0 - 1 1 B a l a n c e a s o n 3 1 . 0 3 . 2 0 1 0 ( 9 3 , 0 6 , 5 0 2 ) 1 7 , 1 9 , 9 8 , 2 6 5 ( 1 6 , 4 9 , 9 3 1 ) ( 2 4 , 9 8 , 5 7 7 ) ( 3 9 , 2 1 , 5 3 , 2 9 6 ) ( 4 0 , 9 6 , 2 7 , 2 7 8 ) ( 2 2 , 1 8 , 0 4 , 9 6 2 ) ( 2 4 , 0 1 , 2 7 , 5 9 0 ) ( 2 2 , 1 8 , 0 4 , 9 6 2 ) ( 2 4 , 9 4 , 3 4 , 0 9 2 ) 5 . 4. In t he ab o v e w o rk i n g, b oo k p ro f it s h a s b e e n a dj us t e d b y R s. 93 , 0 6, 5 0 2/ - be i n g t h e bu si n e ss l os s f or th e F . Y . 2 009 - 1 0 o n t he g ro u n d t ha t u/ s 1 1 5 J B u n de r E x p l a n at i on 1 t o c la u s e (i i i ), t he Bo ok P ro f i t c a n be r e d u c e d b y t h e am ou nt o f l oss br ou ght f or w ar d o r un ab so rbe d d e p r ec i at i o n w h i c h e v e r i s l ess a s p e r b o ok s o f a c c o u nt s . Ba s e d on t he a bo v e sa i d w or k i n g , t he a p pe l l a nt h as c o n t en de d t h a t t h e a m o un t o f l os s br ou ght f or w ar d or t h e u na b s or b ed d ep re c i at i on w h i c h e v e r i s l e s s sh oul d b e a l l ow ed f or w o rk i n g of th e B oo k P r of i t c om p u t a t io n. I n t h i s m a nn e r a s um of R s. 9 3 , 06, 5 0 2/ - i s r ed uc e d fr o m t he B o o k Pr o f it c o m p ut a t i on f or t h e ass e s sm e n t y e a r u n de r c on si de ra t i on. F ro m t he wo rk i n g , i t i s ev i d e n t t h a t t he a p pe l l a nt ha s c o ns i de r e d fo r t h e F. Y . 20 0 9- 10 (A . Y . 2 010 -11 ), t he l os s b e fo re d e p re ci a t i o n an d ha s se p ar a te l y sh ow n d ep re c i at i o n an d a m ort i za t i on. T he b u si ne ss l os s bee n a dj us t e d a ga in st t he op e ni ng p ro fi t b r ou g h t f or w a rd f r om 0 1. 04 . 2 00 9 an d t h e ne t a m o un t i s s h o w n as bu si n e s s l o s s. 5 . 5. F or t he F . Y . 2 01 0-1 1 (A . Y . 20 1 1 - 12 ), sim i l a r wo rk i n g h a s b ee n s h o w n b y t he ap p el l a n t b u t i n t h i s ye ar a f te r e xc l ud i n g d ep re c i at i o n a nd a m ort i za t i on, t he r e sul t is a Bo ok P ro f it o f R s. 17 , 1 9, 9 8, 2 6 5 / -. H ow e v e r, t he a pp e l l a n t h a s n o t se t o ff t he B o o k P ro fi t a n y w h e re ag ai ns t t h e b r o ug ht f or wa rd l oss as o n 0 1. 04 . 2 01 0. Pr o v i s i o n s of Se c ti on 1 1 5 JB (2 ) of E xp l ana t i on 1 t o c l au se ( i i ) i s re p ro du c e d a s un d e r: ' (2 ) 1 2 [ E v e r y as s e s s e e , [ (i i i ) t h e a m o un t o f l o s s b r o u g ht f o r w ar d or un ab s or b e d d e pr e c i a t i on , w hi c h e v e r i s l e s s a s p e r b o o k s o f ac co un t . E x p l an at i o n. - F o r t h e p ur p o s e s of t h i s c l a u s e , - ( a ) t h e l o s s s ha l l n o t i n c l ud e de p r e c i at i o n ; (b ) t h e pr o v i s i o ns o f th i s c l au s e s ha l l n o t a pp l y i f t h e a m o un t of l o s s br ou gh t f or w ar d o r u n ab s o r be d d e p r e c i a t io n i s n i l ; o r] . 5 . 6. O n p la i n re a d i ng o f t h e E xp la na t i o n , i t i s cl ear i n t h e c om p ut a t i on of B oo k P r of it o f t h e cu rr en t y ea r, t he a m ou n t o f I.T.As. No.3843/Del/2017 4 l os s b r o ug ht f or wa rd o r u n ab so rb e d d e p r ec i a t i on w h ic h e v e r i s l e s s a s p e r b o o k i s t o b e s e t o ff . T h e E x pl an a t i o n do e s no t st a t e t h a t t h e p o s i t i o n o f lo ss o r u n a b s or be d d e p rec i a t i o n h as t o be co ns i d e r e d o n y e a r t o y e a r ba si s i . e . t he a s se ss ee ha s t o a g gre g a t e t h e l o s se s a s w e l l a s t h e p ro fi t s f o r al l t he y e a r an d t he n i t w i l l b e a l l ow ed l os s b ro ug h t f o r wa rd or de pr e c i a t i o n w h i ch e v e r i s l e s s. In a f i na n c i a l y e a r , i f t h e r e i s a l o ss a f t e r d ep re c i at i o n b u t a ft e r e x c l ud i n g d e p re c i a t i on , i t re su lt s i n t o p r of i t, t h at pr of i t h a s t o be ag g re ga t e d a nd se t o ff a ga i n st t he b r ou g ht fo r wa r d lo sse s a n d t he re s ul t ant l o ss w i l l b e av a i l a b l e t o t he a ss e s se e f o r t he ne xt y ea r. A pp l y i n g t he p rovi si on t o t h e f ac t s of t he a pp el l an t, i t is c l e ar t h a t t h e pr o f i t f o r t h e F . Y. 2 0 10 - 1 1 ( A . Y . 20 11- 1 2) b e f or e de pr e c i a t i o n a nd a m o rt i z at io n o f Rs. 1 7, 19 , 9 8, 2 6 5 / - i s a v ai l a b l e a g ai n s t w hi c h t h e br ou ght f or w ar d l o sse s a re t o be se t of f . In ca se , i f t h e re a r e any f ur t h er l o ss e s a va i l ab l e a f t e r t h e s et of f , t h e s a me h as t o be c om p are d w it h th e de pre ci a t i o n a n d l e ss er of t h e t wo w i l l b e a ll o w e d as a d e d u c t i o n . I n t h e ca se o f t he ap p e l l ant, t he e n t i re l os s o f F. Y . 20 09 - 10 w i l l g e t ab so rb ed b y th e p r of it f o r F. Y . 2 0 10 - 1 1 a nd t he r e fo re , t h e r e w il l b e a ni l l o s s a s o n 0 1. 04 . 2 01 1, t h e y e a r u nd e r c o ns i d e r a t i on . C on se q u e nt l y, u nde r E x p l a n a t i o n t o cl a use ( i i i ) o f S e c ti o n 1 1 5 J B (2 ) , t hi s c l au se w il l no t ap pl y . I n v ie w t h e re of , t h e ap p el l a n t 's c la i m f or se t o ff o f ac c um u l a te d d e pr e c i at i o n o r l o ss e s w hi c h e v er i s l o w e r i s n ot a s pe r p ro v i si o n s of l a w a n d i s th e re f o re , re j ect e d. N o i nt e r f e re n ce i s t he re f or e , c a ll e d f or i n t he A O ' s ac t i o n of c om p ut i ng t he Bo ok P ro fi t s u / s. 11 5 J B as p er t he r evi se d c om p ut a t i on f i l ed by t h e a pp e l l ant d u r i n g as se s sm e nt p r oc e e d in gs. T h e s e gr o u nd s o f a p p e a l a re r ul e d a ga in s t t he a p pe l l a nt . ” 5. A gg rieve d by the de nial of rel ie f, the asse ssee pre fe rre d appea l before Tri bunal. Th e adjus tm ent of Bo ok pro fi t un der b y Sect ion 1 15J B by low e r of business loss and unab sorbed depreci ation is in issue. In the matter, the ass essee conten ds t hat the onl y dif fe re nce be tween the w orking of the ass ess ee and the CIT (A ) tow ards such adjustment is in rel ati on to F.Y . 2010-11. In FY 2010-11, t he assessee ha s cl aimed total book loss of Rs. 22, 18,04, 962/ - w hich is s olel y on accoun t of unabso rbe d depreci ation loss clai me d of Rs. 39, 38,03, 227/ -. S inc e, suc h I.T.As. No.3843/Del/2017 5 depreci ation exceeds the r esu lt ant book l oss an d thus the t otal book loss r epres ent s t he unabso rbed deprec iati on afte r part abs orpti on aga i nst avail ab le pr ofi t a s show n in t he wo rki ng filed. The C IT (A ) on th e ot her hand has se pa ra ted t he total d eprec iati on of Rs. 39. 38 cr ore as unabso rbed de prec ia tion and take n th e re ma in ing a moun t o f Rs. 17,19, 98, 26 8/ -, i. e. , [Book l oss 22, 18,04, 962 (-) unabsor bed de prec iation 399803227] as busines s loss. S uch met hodolog y has ult i matel y resul ted in Nil b us in ess loss vis -à -vis a n unabsor bed depreciatio n of Rs. 41,21, 25, 855/ - as agains t t he t otal unabso rbed deprec iati on l oss of Rs. 24, 01,27, 590/ - and b usi ness loss of Rs. 93,0 6, 502/ - co mputed by t he asses see. T he ld. cou nsel thus submi ts that t he ld. CIT (A ) has w rongl y comp uted the a mount of unabs orbe d de precia ti on and bus iness l oss f or the Fi nancial Y ear 2010-11 opposed t o the inte ndmen t o f t he provis ion of Sec ti on 115JB res ul ting in the prese nt ana mol y. It w as con te nded t hat the acti on of t he CIT (A ) i s based on both mis c onc epti on of law and misconce pt ion of fac ts. 6. T he L d. D R f or th e Reven ue, on the other hand, relied up on the or de r of the CIT (A ). 7. We ha ve c ons i de red the ri val s ubmi ssions a nd pe rus e d the ma teri al a vailab le on re cor d. T he comput at i on of ‘unabso rbe d depreci ation ’ and ‘ bus iness loss ’ for t he p urposes of adj ust me nt of low er of t he tw o, a gai ns t the ‘book profi ts’ i n terms of c lause (ii i) of E xp la na tion -1 to Sect ion 11 5JB(2) of the A ct is u nder cont rove rs y. 7. 1 Cla use (i ii) of E xplanat ion-1 to Sec ti on 115JB (2) of t he A ct sta tes that an ass essee is enti tled to r edu ce the book p rofi ts b y th e amount of loss br ought fo rw ard (exc ludi ng depreciati on ) or I.T.As. No.3843/Del/2017 6 una bs orbed depr eciati on, wh ic he ve r is l ess as pe r books of account. As pe r t he plai n language of this provis i on, it is to be note d tha t the express ion empl o yed in t he provis ion is the "unabs orb ed deprecia t ion" and n ot the " de preciati on". T he re fe re nce to t he w or ds " unabs orbed dep reci ation" rather than th e w ord "deprecia t io n" re fl ects t he in tent i on of t he Le gi slature that in an y e arlie r ye ar i f the re i s s ome sta ndalone book pro fit, depreci ation of t ha t ye ar st an ds a dj us ted t o t he extent of pro fi t s o avail able and bala nce una bs orbed d eprec iat i on, if any, only sh ould be take n for the purposes of a dj us t me nt unde r Sect io n 115JB . I f inte nt of l eg is latur e wo ul d have been t o c onsi de r profi t a nd depreci ation independ ent of each other there w as no need t o u se the wo rd "u nabsorbed" bef ore t he w ord depre cia tion. The wo rd ‘unabs orbe d’ w oul d be rende re d redundant, if t he view of reve nue is endo rse d. 7. 2 Regardi ng the ter m "una bsor bed depreciati on" w e may als o re fe r to provis ions of sec tion 3 2(2) o f t he Ac t gove rning t he c ar r y forwa rd and set off of unabs orbed depreci at ion. The sa me is re pro duc ed b el ow : " ( 2) Wh e r e , i n t h e ass e s sm e n t o f t h e ass e s se e, fu ll e f f e c t c a n n ot b e gi v e n t o a n y al l ow a n c e un de r s u b - se c t i o n (1 ) i n an y pre v i o u s y e a r, ow i n g t o t he re b ei ng n o pr of i t s o r g a i n s c h a rg e a bl e f or t h a t p re v i o u s y e a r, or o w i n g t o t he p ro f i t s o r g ai ns c h a rge ab le b e i n g l e ss t h a n t h e al l o wa n c e, t h e n , s ub j ec t t o t h e pr o v i si o n s o f su b- s ec t i on ( 2) of se c t i on 7 2 a n d su b - se c t i o n ( 3) of se c t i on 7 3, t h e a l l o w a nc e or t he p a r t o f t h e al l o w a nc e to wh i c h e f f e c t h a s n ot be e n g i ve n, as t he c a se m a y be , sh a ll be a dd ed t o t h e am o u nt o f t h e al l o wa nc e f o r d ep re c i at i o n f o r t he fo l l o w i n g p r ev i o us y e ar a n d de em e d to b e p a rt o f t ha t al l o wa nc e, o r i f t h e r e is no s uc h a l l o w an ce fo r t h a t p re v i ou s y e a r, be d ee m e d to b e th e a l l o w an ce f o r t ha t p re v i o u s y ea r, a nd so o n f or t h e s u c c e ed in g pre v i o u s y e a rs. " I.T.As. No.3843/Del/2017 7 7. 3 From the a fores aid pro visi on als o, it is gat he re d t ha t the ‘unabs orbe d dep reciat ion’ re fers to t he deprec ia t ion or part ther eof w hich rem ained to be se t off agains t t he e xi st ing bus in ess pro fi ts of an y ye ar ow ing t o the fact tha t eit her the re is no profit or s uch pr ofi ts w ere not suff ic ient t o set off th e sa me. 8 Co mi ng to the fac t s, comp uta tion o f adj us t ment a llowa ble in terms of c lause (ii i) of E xpl anat ion- 1 t o Sec tion 115JB (2) for co mputati on of book pro fi t as c lai me d b y t he a ssessee is re pro duc ed h erei n. A s se s s ee w o rk i ng Y e a r s T o t a l U n a b s o rb e d D e p r e c i a t i o n ( P r o f i t ) / L o s s [ e x c l u d i n g d e p r e c i a t i o n R e m a r k s A s o n 1 . 4 .2 0 0 9 P r o f i t ( 1 , 0 1 , 9 4 , 1 4 3 ) O p e n i n g p r o f i t a f t e r a b s o rb i n g D e p r e c i a t i o n a s o n 0 1 .0 4 .2 0 0 9 F . Y . 2 0 0 9 -1 0 1 , 8 3 ,2 2 , 6 2 8 L o s s 1 , 9 5 ,0 0 , 6 4 5 T o t a l b o o k l o s s f o r F Y 2 0 0 9 - 1 0 o f R s . 3 , 7 8 , 2 3 , 2 7 3 / - i n c l u d e b o t h b o o k l o s s ( e x c l u d i n g d e p r e c i a t i o n ) R s . 1 , 9 5 , 0 0 ,6 4 5 / - a n d u n a b so r b e d d e p r e c i a t i o n o f R s . 1 , 8 3 , 2 2 ,6 2 8 /- F . Y . 2 0 1 0 -1 1 2 2 , 1 8 ,0 4 ,9 6 2 T o t a l B o o k l o s s ( i n c l u d i n g d e p r e c i a t i o n ) R s . 2 2 ,1 8 ,0 4 , 9 6 2 ( A ) D e p r e c i a t i o n R s . 3 9 3 ,8 0 3 , 2 2 7 ( B ) S t a n d a l o n e p r o f i t (e x c l u d i n g d e p r e c i a t i o n ) ( - ) R s . 1 7 1 9 9 8 2 6 5 ( A ) - (B ) T h u s , t o t a l l o s s o f R s . 2 2 ,1 8 ,0 4 , 9 6 2 / - r e p r e s e n t u n a b so r b e d d e p r e c i a t i o n a f t e r p a r t a b s o rp t i o n a g a in s t s u c h p ro f i t s ( 3 9 3 8 0 3 2 2 7 – 1 7 1 9 9 8 2 6 5 ) T o t a l 2 4 , 0 1 ,2 7 ,5 9 0 9 3 , 0 6 ,5 0 2 T o t a l b / f l o s s (e x c l ud i n g d e p r e c i a t i o n ) i s l e s s t h a n t o t a l u n a b so r b e d d e p r e c i a t i o n . I.T.As. No.3843/Del/2017 8 9. Si mi larl y, t he adj u stmen t en ti t led to the ass essee a gainst th e book profit as deter mi ne d by t he C IT (A ) is reprodu ced here in: CIT (A) wo rki ng Y e a r s T o t a l U n a b s o rb e d D e p r e c i a t i o n ( P r o f i t ) / L o s s [ e x c l u d i n g d e p r e c i a t i o n R e m a r k s A s o n 1 . 4 .2 0 0 9 P r o f i t ( 1 , 0 1 , 9 4 , 1 4 3 ) O p e n i n g p r o f i t a f t e r a b s o rb i n g D e p r e c i a t i o n a s o n 0 1 .0 4 .2 0 0 9 F . Y . 2 0 0 9 -1 0 1 , 8 3 ,2 2 , 6 2 8 L o s s 1 , 9 5 ,0 0 , 6 4 5 T o t a l b o o k l o s s f o r F Y 2 0 0 9 - 1 0 o f R s . 3 , 7 8 , 2 3 , 2 7 3 / - i n c l u d e b o t h b o o k l o s s ( e x c l u d i n g d e p r e c i a t i o n ) R s . 1 , 9 5 , 0 0 ,6 4 5 / - a n d u n a b so r b e d d e p r e c i a t i o n o f R s . 1 , 8 3 , 2 2 ,6 2 8 / - F . Y . 2 0 1 0 -1 1 3 9 , 3 8 ,0 3 ,2 2 7 P r o f i t ( 1 7 , 1 9 ,9 8 , 2 6 5 ) T o t a l B o o k l o s s ( i n c l u d i n g d e p r e c i a t i o n ) R s . 2 2 ,1 8 ,0 4 , 9 6 2 ( A ) D e p r e c i a t i o n R s . 3 9 3 ,8 0 3 , 2 2 7 ( B ) S t a n d a l o n e p r o f i t (e x c l u d i n g d e p r e c i a t i o n ) ( - ) R s . 1 7 1 9 9 8 2 6 5 ( A ) - ( B ) L d . C I T (A ) c o n s i d e r e d t h e f i g u r e s o f S t a n d a l o n e p ro f i t ( e x c l u d i n g d e p r e c i a t i o n ) a n d D e p r e c i a t i o n s e p a r a t e l y w i t h o u t a b so r b i n g s u c h p ro f i t s a g a i n s t d e p r e c i a t i o n . T o t a l 4 1 , 2 1 ,2 5 ,8 5 5 P r o f i t 1 6 , 2 6 ,9 1 , 7 6 3 T o t a l b / f l o s s (e x c l u d i n g d e p r e c i a t i o n ) i s N i l . U n a b so r b e d d e p r e c i a t i o n i s R s . 4 1 ,2 1 ,2 5 , 8 5 5 / - 10. In t he li ght of l aw enunc ia ted i n pa ragraph 7 (supra), i n o ur view , the as sess ee ha s cor re ct l y considered t he figure of una bs orbed depr eciat ion for Fi nan ci al Y ea r 2010-11 at Rs. 22, 18,04, 962/ - in its w orkin g w hich por ti on has r emai ne d una bs orbed agains t the exis ting book prof its of that ye a r. The CIT (A ) in ou r view, has w rongly co nsidered the e ntire depreci ation all ow ance of Rs. 39, 38, 03, 227/- i ns tea d of res t rict ing I.T.As. No.3843/Del/2017 9 its elf to t he unabs orbed co mponen t. T he figur e of Rs. 39, 38,03, 227/ - consi de re d by t he CIT (A ) i s to ta l d epr ec iat i on all ow an ce ins tea d of unabs orb ed dep reci at ion a nd thus the pos it ion t aken b y the C IT (A ) is contrar y to the phra seo lo gy of cla use ( iii ) of Expla na ti on-1 t o Sectio n 115JB (2). T o re iterat e cla use (i ii ) of Exp la na ti on -1 to Secti on 115JB ( 2) uses the expressio n ‘u nab sorbe d deprec iat ion’ wh ic h has distinct connota tions vis-à-vis t ot al de precia ti on. W e thus fi nd m er it i n the plea of the ass e ssee in j ust ific at ion of t he c omp utat ion of adjus tment a va ilable to it aga ins t the book pro fit. I n this view of the matter, the clai m o f the ass essee of R s.9 3, 06, 50 2/- bei ng low e r of unabs orbe d dep reciati on a nd bus i ness l oss dese rves to be set off a ga inst the cur re nt year bo ok profit in t erms of t he provis ions of c lause (ii i) o f Explanat ion-1 of Secti on 115JB ( 2) of t he A ct. 11. H ence, we reverse the acti on of t he CIT (A) and allow the cla im of t he ass ess ee. 12. In the res ul t, the appeal of t he asses see is allow e d. Order pronounced in the open Court on 10/03/2023. Sd/- Sd/- [YOGESH KUMAR US] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /03/2023 prabhat