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2014 (1) TMI 1765 - AT - Income TaxMAT computation - addition made while computing its book profit under section 115JB in respect of provision for diminution in the value of investments and provision for doubtful debts - Held that:- Once assessee has reduced amount shown by it as a provision for diminution of investment from its total value of investment, it no longer remained a provision. Effectively it was a write off. This view is supported by the decision of the Hon’ble Apex Court in the case of Vijaya Bank –vs.- CIT (2010 (4) TMI 46 - SUPREME COURT ). Therefore claim of assesee with regard to diminution in value of investment has to succeed. For claim in respect of provision for bad and doubtful debts it is not clear whether the total debts of ₹ 23,366.55 lakhs is after deducting the provision of ₹ 1,063.70 lakhs. The amount of ₹ 624.70 lakhs considered by the Assessing Officer for addition is obviously difference between opening provision of ₹ 439 lakhs and closing provision of ₹ 1063.70 lakhs, mentioned in the above schedule. If the provision debited by assessee is indeed deducted from the total debts and only the net balance shown in the balance-sheet then by virtue of decision of the Hon’ble Karnataka High Court in the case of Yokogawa India Ltd. (2011 (8) TMI 766 - KARNATAKA HIGH COURT ) there cannot be any addition of such amount under section 115JB of the Act. However, as mentioned by us, this aspect is not clear. Hence we are of the opinion that the issue regarding provision for doubtful debts requires a fresh look by the Assessing Officer. We, therefore, set aside the order of authorities below in so far as this aspect is concerned, and remit the matter back to the file of Assessing Office for consideration afresh in accordance with law. Allowability of aircraft flying rights charges - Held that:- As decided in assessee's own case for previous assessment year we find that the assessee adduced necessary material to indicate that the aircraft was taken on hire for its business purposes. The Assessing Officer is not competent to decide the business expediency of incurring any expenditure. Be that as it may, it is observed that the Assessing Officer did not deny that log book of the aircraft was not furnished but only that the purpose for which the journeys were undertaken or the names of the persons who undertook the travel was not specified in the log book. It is in such circumstances, that he held 25% of the expenditure for non-business purpose. It is relevant to note that we are dealing with a case of a limited company. It is a settled legal position that there can be no disallowance of any expenditure on account of personal use by the directors of the company.
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