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2010 (5) TMI 605 - ITAT DELHIDeductions under 80IA - What is deemed generation - Held that:- Where plant was set up for generating and selling electricity, the electricity was sold to HPGCL and in case HPGCL is not in a position to buy the electricity from the assessee, the generation of electricity had to be stopped in such a situation, HPGCL pays certain charges in order to compensate for the fixed costs, which are incurred even when there is no generation and are required to be incurred for keeping the plant in ready condition therefore, the generated income has a direct nexus with the business of industrial undertaking. Thus is eligible for deduction under 80IA, Treatment of Provision for Bad Debt while computation of Book Profit under 115J - Held that:- As per amendment made by the Finance (No. 2) Act, 2009 in section 115JB whereby clause (i) reading as "the amount or amounts set aside as provision for diminution in the value of any asset" has been inserted in Explanation 1 to section 115JB of the Act meaning thereby that the amount or amounts set aside as provision for diminution in value of assets shall be added back to the net profit if the same is debited to the profit and loss account, for the purpose of determining the book profit under section 115JB of the Act. It is now well settled that the provision for bad debt is amounted to a provision for diminution in the value of any asset. The same shall be added back to the net profit for determining book profit. The ground raised by the assessee is rejected.
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