MAT Computation of book profit u/s 115JB - adjustment made on account of provision for doubtful debts and advances - Scope of amendment - CIT(A) confirmed the action of AO by observing that as per the amended provisions of section 115JB vide Finance Act, 2009 a new clause (i) has been inserted to provide that the amount set aside as provision for diminution in value of any asset is to be added in the book profit. Against this order of CIT(A), the assessee is in further appeal before us.
HELD THAT:- According to the amended provision, amount set aside as provision for diminution in value of any asset is required to be added in the book profit. Clause (i) has been inserted retrospectively with effect from 1-4-2001 meaning thereby from assessment year 2001-02, such provision for bad debts is to be added in the book profit while computing book profit under section 115JB.
The ratio laid down by the Hon’ble Supreme Court in the case of HCL Comnet Systems & Services Ltd.[2008 (9) TMI 18 - SUPREME COURT] is no more applicable in view of the amended provisions brought in the statute with retrospective effect. The relevant assessment year under consideration is assessment year 2005-06 to which amended provisions are applicable.
Recently Hon’ble Delhi High Court in the case of CIT v. Ilpea Paramount (P.) Ltd.[2010 (2) TMI 45 - DELHI HIGH COURT] after considering the decision of the Hon’ble Supreme Court in the case of HCL Comnet System & Services Ltd. (supra) held that amendment brought in section 115JA was brought with retrospective effect, accordingly, provision for doubtful debts are nothing but provision for diminution in the value of the asset covered under clause (g) of the said Explanation.
It was accordingly, held that such provision is required to be added while computing book profit u/s 115JA. Similarly, amendment in section 115JB was also brought by the same Finance Act with effect from assessment year 2001-02, therefore respectfully following the order of the Hon’ble Jurisdictional High Court, we do not find any infirmity in the orders of the lower authorities - Appeal of the assessee is dismissed.
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