Law:

Section:

Section 115JA, read with section 154, of the Income-tax Act, 1961 - Minimum alternate tax - Assessment year 1997-98 - Whether in view of clause (b) of Explanation (iii) to section 115JA, as introduced by Finance Act, 2002 with effect from 1-4-1997, in order to allow deduction of brought forward business loss or unabsorbed depreciation in computation of book profit, both should be available as per accounts of assessee - Held, yes - In course of regular assessment, Assessing Officer calculated book profits under section 115JA after allowing assessee's claim for carry forward depreciation - Subsequently, Assessing Officer noticed that, by virtue of clause (b) of Explanation to section 115JA, deduction was admissible only if assessee had brought forward business loss as well as depreciation for relevant previous year - Since in assessee's case, brought forward business loss was not available, Assessing Officer opined that claim of assessee was wrongly allowed - Accordingly, Assessing Officer rectified assessment under section 154 - Whether since original assessment was completed without reference to statutory provision and in clear violation of same, such assessment happened to be a mistake, that could be rectified under section 154 - Held, yes - Whether, therefore, impugned rectification order passed by Assessing Officer was to be upheld - Held, yes FACTS In course of assessment, the Assessing Officer noticed that the income computed on the basis of return filed was below 30 per cent of the book profit and, therefore, the assessment was proposed on 30 per cent of the book profit under section 115JA. The assessee had claimed deduction of Rs. 1.43 crores as carry forward depreciation, which was originally allowed by the Assessing Officer while completing regular assessment. However, later on the Assessing Officer noticed that by virtue of clause (b) of the Explanation(iii) to section 115JA, deduction was admissible only if the assessee had brought forward business loss as well as depreciation for the previous year. It was noticed that the carry forward business loss at the end of the year 1994-95 was Rs. 1.07 crores and the carry forward depreciation was Rs. 5.78…

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