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2016 (7) TMI 1572 - AT - Income TaxDisallowance for provision for bad & doubtful debts - deduction u/s 36(1)(viia) to be restricted to actual provision made in the books - AO disallowed the deduction as claimed by assessee over and above the provision created in assessee’s books of account and added to the total income of the assessee - HELD THAT:- Assessee fairly acceded that the issue is already covered in favour of Revenue. The relevant extract of the case STATE BANK OF PATIALA vs. COMMISSIONER OF INCOME TAX & ANR [2004 (5) TMI 12 - PUNJAB AND HARYANA HIGH COURT] as held for making of a provision for bad and doubtful debts equal to the amount mentioned in s. 36(1)(viia) is a must for claiming such deduction. In the present case, the assessee has not made any provision in the books of account for the assessment year under consideration - Assessee claiming deduction for bad debt under unamended s. 36(1)(viia) but after amendment enhancing the deduction in the return by making up the shortfall in the provision in the balance sheet of subsequent year, the claim to the extent of enhancement is not allowable - Decided against assessee. Disallowance invoking the Rule 8D(2)(iii) of section 14A - HELD THAT:- In the instant case since the assessee is a dealer in share, therefore the rigorous provision u/s 14A r.w.s 8D of the IT Rule shall not be applied with respect to share held by way of stock-in-trade. In this connection, whether assessee is a dealer in share or not we are placing our reliance in the case of UNITED COMMERCIAL BANK [1999 (9) TMI 4 - SUPREME COURT] respectfully where it has been held that the assessee is dealer in shares. Thus holding the bank as dealer in shares/ securities and consequently no disallowance is warranted on the shares/securities held as stock in trade. Accordingly we reverse the orders of Authorities Below and allow the ground raised by assessee. Disallowance of provision of leave encashment u/s. 43B - HELD THAT:- Provision for leave encashment that this issue is pending before Hon’ble Supreme Court in the case of Exide Industries Ltd. Vs. Union of India [2007 (6) TMI 175 - CALCUTTA HIGH COURT] and fairly conceded that subsequently Hon'ble Supreme Court has stayed this judgment of Hon'ble jurisdictional High Court. Assessee fairly stated that let Hon'ble Supreme Court decide the issue and by that time the matter can be remitted back to the file of AO for fresh adjudication in term of the decision of Hon'ble Supreme Court. On this, Ld. CIT DR has not objected to the same. Accordingly, we set aside this issue to the file of the AO to await the decision of Hon'ble Supreme Court and decide the issue accordingly. This issue of assessee’s appeals is remitted back to the file of AO and allowed for statistical purposes. MAT applicability u/s 115JB to company established under the Companies Act, 1956 - HELD THAT:- in view of the legislative change brought about by the introduction of Explanation 3 in section 115JB of the Act by the Finance Act, 2012 , the assessee's contention in fact stands more fortified. The Explanation 3 to section 115JB makes it evidently clear that section 115JB is applicable only to entities registered and recognized to be companies under the Companies Act, 1956. Since the assessee is not a company within the meaning of Companies Act, 1956, section 211(2) and proviso thereon is not applicable and therefore consequently we hold that the provisions of section 115JB of the Act are also not applicable. Direction to AO for re-computation of the set off and carry forward of unabsorbed business loss and depreciation brought forward from the earlier years - AO to recompute the set off and carry forward of unabsorbed business loss and depreciation brought forward from the earlier years after giving effect to this appeal. Assessment disallowed on the ground that no revised return was filed - HELD THAT:- Assessee is very much entitled make a legal claim without filing the revised return of income. We uphold the order of Ld. CIT(A) and this ground of Revenue’s appeal is dismissed.
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