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2018 (3) TMI 960 - KERALA HIGH COURTMinimum Alternate Tax (MAT) determination payable u/s 115J and 115JA - whether book profits, the provision for bad and doubtful debts has to be added on to determine MAT payable under Sections 115J and 115JA applicable in the respective assessment years? - Held that:- The provision for bad and doubtful debts is not a provision for liability. There was no provision available in the statute to add on the provision for bad and doubtful debts, which results in diminution of assets, to the book profits as computed under Sections 115J and 115JA. The lacuna noticed by the Honourable Supreme Court was supplied by the Union Parliament by way of amendment which has retrospective effect. This is a permissible legislative exercise and hence there can be no claim raised based on the Honourable Supreme Court’s decision for the year 1998- 99 in Commissioner of Income Tax v. HCL Comnet Systems and Services Ltd.[2008 (9) TMI 18 - SUPREME COURT ]. The legal infirmity noticed has been now removed and it is possible for adding back the provision for bad and doubtful debts, which as per the Honourable Supreme Court’s decision results only in diminution of assets. We, hence, answer the question for the assessment year 1998-99 with respect to Section 115JA in favour of the Revenue and against the assessee. If the remand order has been complied with, then necessarily, the same shall be revised in accordance with the findings in this Income Tax Appeal.
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