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2022 (11) TMI 183 - AT - Income TaxMAT Computation u/s 115JB - Provision for doubtful debts - ascertained liability - addition in both income under normal provisions of the Act as well as book profits u/s. 115JB - CIT(A) has deleted the adjustment made by stating that the assessee while computing the income under normal provisions of the Act already disallowed the provision and adding the same would amount to double addition - HELD THAT:- Assessee has adjusted the provision of bad & doubtful debts against the sundry debtors and following the decision of the Hon’ble Supreme Court in the case of Vijaya Bank [2010 (4) TMI 46 - SUPREME COURT] which is followed in the decisions of Kirloskar Systems Ltd. [2013 (12) TMI 9 - KARNATAKA HIGH COURT] and Yokogawa India Ltd. [2011 (8) TMI 766 - KARNATAKA HIGH COURT] by the Hon’ble jurisdictional High Court, we hold that the provision made by the assessee for bad & doubtful debts is the actual write off and not a mere provision and therefore cannot be adjusted under clause (i) of Explanation 1 to sub-section (2) of section 115JB. Hon’ble Supreme Court in the case of HCL Comnet Systems [2008 (9) TMI 18 - SUPREME COURT] has clearly laid down that when the provision is made against a debt receivable, cannot be equated with a provision for liability and therefore cannot be adjusted under clause (c) of Explanation 1 to sub-section (2) of section 115JB. We hold that the addition made by the AO towards provision for bad & doubtful debts to the book profit u/s. 115JB is not tenable and the same is deleted. Assessee’s appeal is allowed.
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