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2019 (7) TMI 29 - HC - Income TaxMAT computation - whether the provision made by the assessee for purchase tax, purchase tax on cane subsidy and wealth tax are not to be added while computing the book profits u/s 115JA? - HELD THAT:- Notification for payment of additional cane price etc., would not arise in the Assessment Years under consideration and only in the next year. In the absence of any data to show that scientific method was adopted, we are of the considered view that the provisions made by the assessee towards purchase tax, purchase tax on cane subsidy and wealth tax are to be treated as unascertained liability. Therefore, the factual finding recorded by two authorities and the Tribunal is fully justified. So far as the wealth tax is concerned, the decision relied on by the assessee in the case of Shree Sajjan Mills Ltd [1985 (10) TMI 2 - SUPREME COURT] was rightly distinguished by the authorities below and the Tribunal has held in the said case that the amount on wealth tax, which was paid should not be added to the net profit. Accordingly, the substantial questions of law nos.2, 3 and 4 are answered against the assessee. Provision of Bad Debts, this arises in two of the Assessment Years, namely, 1997-98 and 1998-99 - This issue came up for consideration in the assessee's own case in [2012 (7) TMI 698 - MADRAS HIGH COURT] wherein it was held that the provisions for doubtful debts and provision for doubtful advances, which are nothing but provision for diminution in the value of the asset, are specifically covered under Clause (g) of the said Explanation and the provision for gratuity could not be added to the book profits while computing the income of a Company u/s 115JA. Unabsorbed depreciation and expenditure in connection with Euro issue allowable as deduction u/s 35D - It is not in dispute before us that the said question has been decided by the Division Bench of this Court in the assessee's own case for the Assessment Years 1994-95 and 1995-96, in the decision of EID Parry (India) Limited vs. Deputy Commissioner of Income Tax [2012 (7) TMI 698 - MADRAS HIGH COURT] - decided in favour of the assessee Disallowance of provisions for payment of purchase tax and wealth tax in computing the book profits u/s 115JA while processing return u/s 143(1)(a) - debatable issue - HELD THAT:- As rightly pointed out by Mr.T.Ravikumar, learned Senior Standing Counsel for the Revenue that this cannot be considered as a debatable issue because of the law laid down by the Division Bench of this Court in the case of Dy CIT vs. Beardsell Ltd. . [2000 (3) TMI 37 - MADRAS HIGH COURT] In the said decision, it was held that if a debt had become irrecoverable the same could be written off and deducted from the profit of the business. A debt, the recovery of which was doubtful could not be termed to be an ascertained liability as mentioned u/s 115J of the Act and could not be excluded from the book profits. Thus, AO was fully justified in coming to the conclusion that the issue pointed out by the assessee is not a debatable issue and there were no two opinions possible at the relevant point of time. - Decided against assessee.
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