115jb - adjustment to book profits

50 for business loss and 15 for unabsorbed deprecn...

i think 10 for unabs dep as profit of rs.15 will be adjusted..

In Year 3
Profit is 10 Lakh 
Unabsorbed depreciation is 20 Lakh
Business Loss is 50 Lakh 
Whichever is lower is to be adjusted in P&L for computing book profit as per 115jb. So in our case the unabsored depreciation i.e. 20lakh
so your book profit will be nil (10-10) 
and unabsorbed depreciation available for set off is 10 lakh & B/f losses is 50 lakh

We have adjusted 5 lakhs in Year-2 as per 115JB not as per companes act right?

My question is if a company had profits in year after continous losses, whether that profit shall be adjusted against Business loss or un absorbed depreciation?

Will your answer is different if in year-1 Business loss is 25 and unabsorbed depreciation is 50?

Yes
Then in ur recent example in 2 nd year  profit should be adjusted from the unabsorbed business loss which is 25 lakh as business loss is less than depreciation
Then in third year u need to again compare the unbosrbed business loss & depreciation whichever is lower in ur case it is business loss i.e. 20 lakh . So profit will be (10-10) Nil. 
and for the subsequent PY the business losses availabe to u will be 10 lakh & Unabsorbed Depreciation will be 50 lakh