RAMA NEWSPRINT AND PAPERS LTD,MUMBAI vs. DCIT CIR 3(3), MUMBAI

M/s. Rama Newsprint and Papers Ltd., 2. The short issue that arises for our consideration is as to whether assessee is eligible for set off of lower of brought forward business losses or unabsorbed depreciation as per books of accounts in accordance with Clause-(iii) of Explanation(1) of Section 115JB(2) of the Act. The interconnected issue involved therein is as to whether the deferred tax asset created by the assessee in its balance sheet as per the Accounting Standard-22 (AS-22) issued by the Institute of Chartered Accountants of India (ICAI) could be construed as part of accumulated losses as per books of accounts and consequently available for set off against book profits computed in the manner provided u/s.115JB of the Act.

We have heard rival submissions and perused the materials available on record including the paper book filed by the assessee. We have also gone through the audited financial statements for the year ended 31.3.2008 of the assessee. We find from the audited financial statements for the year ended 31.3.2008 of the assessee that, the assessee has reported net profit (after reducing fringe benefit tax) for the year in the sum of Rs.161.70 lakhs. We find that assessee has got sufficient amounts in the deferred tax asset created on account of unabsorbed depreciation, unabsorbed business loss , among others. The ld. AO while framing the assessment for the year under consideration had not considered the deferred tax asset as a part of accumulated loss as per books of account. The ld. AR placed on record the order passed by the ld. AO u/s.143(3) r.w.s. 254 of the Act dated 13/12/2018 for the A.Y.2007-08 wherein the ld. AO had categorically recorded a finding that deferred tax asset has indeed been created by the assessee in earlier years out of accumulated book losses. In view of this order passed for the A.Y.2007- 08 by the ld. AO, we deem it fit and appropriate, to remand the issue in dispute before us back to the file of the ld. AO to decide the same in the light of the order passed by him for A.Y.2007-08 vide order dated M/s. Rama Newsprint and Papers Ltd., 13/12/2018. Accordingly, the grounds raised