Sungroup Enterprises (P) Ltd. vs. DCIT, Circle 24 (2)

Parties Involved

Facts Summary

The assessee, Sungroup Enterprises (P) Ltd., filed its return of income on 30.11.2012 for Assessment Year 2012-13 declaring total income of Nil. The assessee is engaged in the business of providing investment advisory/management consultancy services to its clients. The case was selected for scrutiny and assessment under section 147 of the Income-tax Act, 1961 read with section 143(3) was completed by the Assessing Officer on 30.12.2017 assessing the deemed total income at Rs.85,75,056/- under section 115JB of the Act by making the total adjustment of brought forward losses and unabsorbed depreciation. Aggrieved with the proposed addition of Rs.57,20,752/- passed by the AO in reassessment proceedings, the assessee filed an appeal before the ld. CIT (A)-8, New Delhi. The main issue raised by the assessee before ld. CIT (A) was that as per the provisions of section 115JB of the Act, the lower of book losses or unabsorbed depreciation can be set off. The lower of the two figures has to be arrived at after calculating the profits for each year separately.…

Legal Issues

• 1. Whether the learned Commissioner of Income tax (Appeals) was wrong on facts and in law in confirming the action of the learned assessing officer in issuing notice under section 148 of the Income tax Act, 1961 and in reopening of the assessment.
• 2. Whether the learned Commissioner of Income tax (Appeals) erred in law in confirming the action of the learned assessing officer wherein he stated that, in terms of section 115JB of the Act, setting off of current year's income against losses brought forward or unabsorbed depreciation can't be done at the choice of the assessee company in a manner more beneficial to it.
• 3. Whether the learned Commissioner of Income tax (Appeals) erred on facts and in law in computing figures of past years book profits / losses / depreciation as required in terms of section 115JB of the Act, at figures as mentioned in page 7 of the appellate order, contrary to the figures as mentioned in respective financial statements of the assessee company.
• 4. Whether the learned Commissioner of Income tax (Appeals) erred on facts and in law in computing the figures of carry forward of unabsorbed business losses and unabsorbed depreciation in terms of section 115JB of the Act as at 31.03.2012 at Rs. 36,67,71,690 and Rs. 1,41,34,586 respectively as mentioned in page 7 of the appellate order as against the figures of Rs.37,94,71,056 and Rs.3,60,85,717 respectively carried forward by the assessee company.
• 5. Whether the learned Commissioner of Income tax (Appeals) erred in law in not passing a speaking order on the issue of carry forward of MAT Credit in terms of section 115JAA of the Act restricted by the learned assessing officer at Rs.15,86,387 being the amount of tax on total income computed by him in terms of section 115JB excluding the amount of Surcharge and Cess thereon to be paid on the amount of tax of Rs.15,86,387/-.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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