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2022 (8) TMI 1125 - AT - Income TaxMAT Computation - book profit of the assessee-company u/s 115JB on account of provision for doubtful debts and provision for diminution in the value of investment - HELD THAT:- VODAFONE ESSAR GUJARAT LTD. [2017 (8) TMI 451 - GUJARAT HIGH COURT] held a mere provision is made by merely debiting the Profit and Loss Account and crediting the provision for bad and doubtful debts; but if such provision is simultaneously obliterated by the assessee from its account by reducing the corresponding amount from the loans and advances on the asset side of the balance-sheet thereby showing the loans and advances on the asset side of the balance-sheet as net of the provision at the end of the year, it would amount to a write off and such actual write off could not be hit by clause (i) of the Explanation to Section 115JB of the Act. As demonstrated by assessee from the annual account of the assessee-company, the provision made for doubtful debts as well as for diminution in the value of investment was reduced by the assessee from the corresponding amount of trade receivables and investments as reflected in the balance-sheet at the end of the year and this being so, we hold, respectfully following the decision of the Hon’ble Gujarat High Court in the case of Vodafone Essar Gujarat Ltd that it is not merely a case of provision but an actual write off which would not be hit by clause (i) of Explanation to Section 115 JB of the Act. We accordingly delete both the additions made by the Assessing Officer and confirmed by the learned CIT(A) to the book profit of the assessee-company under Section 115JB of the Act on account of provision for doubtful debts and provision for diminution in the value of investment and allow ground Nos. 2 & 3 of the assessee’s appeal.
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