Question ID : 40373

Sec.115JB B/F Loss and UD

As per sec.115JB for computing MAT, brought forward business loss or unabsorbed depreciation whichever is lower as per books has to be adjusted. Is this comparison of business loss vs depreciation to be made year on year for past years or cumulative figure as on date? All the past years have losses and no profit in any of the preceding years.

Answer ID : 80152

Year to year comparison has to be done. Then compared results to sum up and least of the two sums should be deducted.

Answer ID : 80157

Year on year approach may be the best and easy to follow. Anyway, there is also a consolidated approach as well. Follow any one of the approach consistantly.

Answer ID : 80158

Hi Mr. Balasubramanian, Though I agree that section 115JB does not provide any specific methodology for arriving at the business loss and unabsorbed depreciation for the purpose of arriving at the book profits of the current year, however courts have been taking a consistent view that cumulative business loss and unabsorbed depreciation should be considered till date. Kindly refer the case of Bangalore International Airport Ltd. v. DCIT ITA No.510/Bang/2014 which specifically deals with this issue and ruled that cumulative figures should be considered. In your facts, it is also appropriate to consider the cumulative figures which would be beneficial to the taxpayer.

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