TMI Blog2011 (8) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... e sum. Therefore, the said liability is not NPA but the performing assets as they have continued to be forming part of sundry debtors. As the aforesaid doubtful debts were not actually written off under Section 36(i)(vi) from the books the said amount is to be added in arriving at the net income from the book profits. - Appeal decided in favour of revenue. - IT Appeal Nos. 1082 & 1083 of 2006 - - - Dated:- 29-8-2011 - N. Kumar and Ravi Malimath, JJ. K.V. Aravind and M.V. Seshachala for the Appellant. JUDGMENT N. Kumar, J. These two appeals are preferred by the revenue challenging the order passed by the Tribunal which has granted the benefit of not adding back the doubtful investments and doubtful advances for computin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee has not calculated the income under Section 115JB as per Statute and therefore, assessment was completed by adding back the provision for NPA of Rs. 1,45,88,826/- and the total income was computed. Aggrieved by the said order, the assessee preferred an appeal to the Commissioner of Appeals. The Commissioner of Appeals held that the assessee being a non-banking financial institution has created the provision for non-performing assets in accordance with RBI Guidelines. This provision is created not against any liabilities but for depreciation of assets and the adjustment on book profits was not warranted. In view of the law declared in the various judgment referred to in the order, the addition was deleted and the appeal ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Authority to add back the provision to the book profit in computation of income under Section 115JB was incorrect. However, in view of the aforesaid amendment, which is made retrospective in operation with effect from 01.04.1998, the said amendment applies to the relevant assessment year. The result is that the amount or amounts set aside as provisions for diminution in the value of any asset is to be added for the purpose of computing net profit out of book profit. The order passed by the Assessing Authority makes it very clear that after perusing the books of account it was found that the disputed items are not ascertained liabilities but reserves created for doubtful debts, which is an asset. The ascertained liability cont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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