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2021 (10) TMI 1009 - AT - Income TaxMAT Computation u/s 115JB - Amount of the provision for bad and doubtful debt to be taken for the purpose of computing book profit u/s 115JB - AO rejected the contention of the claim of bad debt on the ground that assessee had not placed anything on record to substantiate its claim - claim of bad debt written off under section 115JB for computation of the book profit was rejected by the learned CIT(A) - HELD THAT:- Under the provisions of the Act book profit is computed after making adjustment mentioned in the section 115JB of the Act. In view of the settled position in the case of Apollo Tyres Ltd. [2002 (5) TMI 5 - SUPREME COURT] and Malyalam Manorama [2008 (4) TMI 20 - SUPREME COURT], the assessee or the Assessing Officer is not permitted to make any adjustment to the book profit except which has been specifically provided therein and, therefore, the assessee was required to add back provision which has been provided in the books of accounts. CIT(A) has held that claim of bad debt actually incurred during the year did not appear in the profit and loss account and, therefore, same could not be added back since the same is not covered under Explanation 1 below section 115JB of the Act. Thus, as per the Learned CIT(A), the Assessee has not credited the amount in relation to the bad debt in the profit and loss account made on the basis of the books of account, whereas claim of the assessee is that effect of the bad debt written off has been taken into consideration in books of accounts. In our opinion, this is a matter of the verification with the books of account of the assessee. From the details filed before us prima facie it appears that the amount of bad debt written off has been reduced while computing the income as per provision of Act and, therefore, we feel it appropriate to restore this issue back to the file of the Assessing Officer for deciding after verification of the books of account and financial statement prepared thereon for the year under consideration. Assessing Officer has to verify the amount of provision for doubtful debt in the books of accounts and book profit has to computed as per Explanation 1 below the section 115 JB - Appeal of assessee is allowed for statistical purposes.
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