ITAT grants reduction of Unabsorbed Depreciation to the tune of Rs.8.48 Cr to GoAir [Read Order]

ITAT grants reduction of Unabsorbed Depreciation to the tune of Rs.8.48 Cr to GoAir [Read Order]

ITAT Mumbai - ITAT - Reduction - Unabsorbed Reduction - Go Airlines - Taxscan

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench granted reduction of unabsorbed depreciation amounting to Rs.8.48 Crores to GoAir.

The assessee, M/s. GoAir (India) Ltd. is a company engaged in the business of operating aircraft for carriage of passengers and goods and had filed its return of income declaring nil losses under normal provisions of the Act which was later revised declaring loss of Rs.35,76,576 and book loss under section 115JB of the Act at Rs.8,66,22,306.

This book loss was arrived by the assessee after deducting lower of brought forward business loss or unabsorbed depreciation as per books of accounts. We find that assessee had made a net profit of Rs.8,48,95,742 and had reduced the least, being unabsorbed depreciation as per books of accounts while computing the book profit under section 115JB of the Act.

The AO had observed that while determining book profit under section 115JB of the Act, the assessee had already availed reduction on account of depreciation of Rs.10,31,03,195 and Rs. 6,78,12,248 respectively, while computing book profit under section 115JB of the Act for those years.

Accordingly, the AO show caused the assessee seeking explanation from the assessee as to why the reduction claim of Rs.8,48,95,742 should not be disallowed while computing book profit under section 115JB of the Act.

The issue raised in this case was whether the CIT(A) was justified in upholding the action of the 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.

The coram consisting of Shaktijit Dey and M. Balaganesh directed the AO to grant a reduction of unabsorbed depreciation amounting to Rs.8,48,95,742 and re-compute the book profits under section 115JB of the Act thereon.

The court further directed the AO to verify the TDS certificates or any other supporting evidence and accordingly, grant the TDS credit eligible to the assessee in accordance with law.

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