MAT:: Deduction of Brought Frw. Loss or Depreciation w.e.l

Dear all,

Does anyone knows the reason why under clause iii) of Explanation to section 115JB the lower of Unabsorbed Depreciation or brought forward loss is allowed. Why is this clause inserted in the law.

The text is reproduced below:

" the amount of loss brought forward or unabsorbed depreciation, whichever is less as per books of account.

Explanation-For the purposes of this clause, -

(a) the loss shall not include depreciation;

(b) the provisions of this clause shall not apply if the amount of loss brought forward or unabsorbed depreciation, is nil"