Vodafone Essar East Ltd. formerly known as Hutchison Telecom East Ltd. v. JCIT

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The Tax Publishers2018 TaxPub(DT) 1241 (Kol-Trib) Vodafone Essar East Ltd. 'Formerly Known as Hutchison Telecom East Ltd.' v. Jt. CIT INCOME TAX ACT, 1961 --MAT--Book profit under section 115JBTreatment of unabsorbed depreciation----As unabsorbed depreciation in case of assessee-company was lesser than brought forward business losses, therefore, assessee was entitled to deduction of unabsorbed depreciation while computing book profit under section 115JB.--Assessee-company had shown brought forward business losses of Rs. 1.60 crores and unabsorbed depreciation of Rs. 37 crores. AO while determining book profit for the year under consideration disallowed deduction of unabsorbed depreciation pertaining to asst. yr. 2002-03 amounting to Rs. 6 crores.Held: A plain look at section 115JB makes it clear that assessee would be entitled to claim deduction of either brought forward losses or unabsorbed appreciation, whichever is less. In the instant case, the amounts of brought forward losses were greater than the amount of unabsorbed depreciation. Therefore, assessee was entitled to claim deduction of unabsorbed depreciation while determining profit under section 115JB and denial of deduction of unabsorbed depreciation pertaining to asst. yr. 2002-03 was not justified. Income Tax Act, 1961 Section 115JB *REFERRED :* FAVOUR : In assessee's favour. A.Y. : 2004-05 to 2008-09 INCOME TAX ACT, 1961 --Interest under section 234B--LeviabilityTaxes paid under MAT provisions----Levy of interest under section 234B was inescapable, even if taxes were paid under MAT provisions as per section 115JB.--Assessee-company challenged levy of interest under section 234B on the ground that taxes were paid under provision of Minimum alternate Tax (MAT) under section 115JB.Held: Sections 115J and 115JA are special provisions. Section 207 envisages that tax shall be payable in advance during any financial year on current income in accordance with the scheme provided in sections 208 to 219 (both inclusive) in respect of the total income of the assessee that would be chargeable to tax for the assessment year immediately following that financial year. Section 215(5) defines what is 'assessed tax, i.e. tax determined on the basis of regular assessment so far as such tax relates to income subject to advance tax. In the instant case, evaluation of current income and determination of assessed income had to be made in terms of statutory scheme comprising section 115J/115JA. Hence, levying of interest under section 234B was inescapable. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2018 TaxPub(DT) 1241 (Kol-Trib)

Vodafone Essar East Ltd. 'Formerly Known as Hutchison Telecom East Ltd.' v. Jt. CIT

INCOME TAX ACT, 1961

--MAT--Book profit under section 115JBTreatment of unabsorbed depreciation----As unabsorbed depreciation in case of assessee-company was lesser than brought forward business losses, therefore, assessee was entitled to deduction of unabsorbed depreciation while computing book profit under section 115JB.--Assessee-company had shown brought forward business losses of Rs. 1.60 crores and unabsorbed depreciation of Rs. 37 crores. AO while determining book profit for the year under consideration disallowed deduction of unabsorbed depreciation pertaining to asst. yr. 2002-03 amounting to Rs. 6 crores.Held: A plain look at section 115JB makes it clear that assessee would be entitled to claim deduction of either brought forward losses or unabsorbed appreciation, whichever is less. In the instant case, the amounts of brought forward losses were greater than the amount of unabsorbed depreciation. Therefore, assessee was entitled to claim deduction of unabsorbed depreciation while determining profit under section 115JB and denial of deduction of unabsorbed depreciation pertaining to asst. yr. 2002-03 was not justified.

Income Tax Act, 1961 Section 115JB

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2004-05 to 2008-09

INCOME TAX ACT, 1961

--Interest under section 234B--LeviabilityTaxes paid under MAT provisions----Levy of interest under section 234B was inescapable, even if taxes were paid under MAT provisions as per section 115JB.--Assessee-company challenged levy of interest under section 234B on the ground that taxes were paid under provision of Minimum alternate Tax (MAT) under section 115JB.Held: Sections 115J and 115JA are special provisions. Section 207 envisages that tax shall be payable in advance during any financial year on current income in accordance with the scheme provided in sections 208 to 219 (both inclusive) in respect of the total income of the assessee that would be chargeable to tax for the assessment year immediately following that financial year. Section 215(5) defines what is 'assessed tax, i.e. tax determined on the basis of regular assessment so far as such tax relates to income subject to advance tax. In the instant case, evaluation of current income and determination of assessed income had to be made in terms of statutory scheme comprising section 115J/115JA. Hence, levying of interest under section 234B was inescapable.