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2018 (1) TMI 855 - AT - Income TaxAddition u/s.115JB under the head ‘provision set aside for diminution in the value of investment holding that the same are not in the nature of provision only.” - MAT - Held that:- As per amended provisions of Section 115JB requires provision for diminution in value of investment to be added back to determine Minimum Alternate Tax. Fair value of units of mutual funds was lower than its cost by ₹ 46,94,62,365/- and the same being current investment, the appellant following mandatory Accounting standard – 13, charged ₹ 46,94,62,365/- to Profit & Loss Account and prepared its accounts in accordance with Schedule VII provided in Section 211 of the Companies Act 1956. The assessee had credited the difference between the sale price and fair value as on 31.03.2008 to Profit & Loss Account and not the difference between sale price and its cost. Such accounting treatment is impossible where the provision is made instead of write off. Considering the above facts a debit of ₹ 46,94,62,365/- appearing in Profit & Loss Account is not a provisions set aside for diminution in value of investment but a actual charge to the Profit & Loss account which has been written off against the value of the current asset. Debit of ₹ 46,94,62,365/- appearing in Profit & Loss Account is not a provision of set aside for diminution in value of investment but the actual charged for the loss in the diminution in value of investment. Therefore, we are of the view that for the book profit purpose of section 115JB is not required to be increased by ₹ 46,94,62,365/- as the same is not in the nature of provision. - Decided against revenue
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