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2021 (1) TMI 83 - ITAT PUNEAddition on account of reversal of bad debts provision - assessee had made a provision for bad and doubtful debts and then added back the same amount while computing its total income - HELD THAT:- Assessee eventually did not claim any deduction at the time of creation of provision for bad and doubtful debts. This mode of debiting the Profit and loss account and then adding back the same amount in computation of total income is tax-neutral. Once the creation of provision did not render reduction in the income, its later reversal, equally, cannot also lead to generation of taxable income notwithstanding the manner of depiction in the accounts. CIT(A) has categorically recorded this fact that in earlier years the assessee had made a provision for bad and doubtful debts and had added back the same while computing the total income. No material has been placed on record by the ld. DR to controvert this finding. In view of above discussion, we are satisfied that the ld. CIT(A) was justified in deleting the addition. - Decided in favour of assessee.
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