Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

The Commissioner of Income Tax Versus M/s. Salgaonkar Mining Industries Pvt Ltd

2015 (5) TMI 231 - BOMBAY HIGH COURT

Book Adjustments u/s 115JA - Minimum Alternate Tax (MAT) - Provision for doubtful debts - entire provision represented advances towards sister concern and not trade debts - Held that:- It is very clear from the language of clause (c) of the explanation to Section 115JA(2) of the Act that it only refers to the amount set aside for provisions made for meeting liabilities, which are not ascertained. In the present case, indisputably, the amount of ₹ 20.5 lakhs sought to be added to the book p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

planation to Section 115JA(2) of the Act. Thus, the issue stands concluded in favour of the respondent by the decision of the Apex Court in HCL Connect System and Services Ltd (2008 (9) TMI 18 - SUPREME COURT) and Rolta India Ltd (2011 (1) TMI 5 - SUPREME COURT OF INDIA) - Decided in favour of the respondent Assessee

Interest u/s 234B&C - ITAT deleted addition - Held that:- This question stands concluded in favour of the Revenue, by the decision of the Apex Court in Joint Commissioner .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

order relates to assessment year 1997- 1998. This appeal was admitted on 06/08/2007 on the following substantial questions of law : A) Whether on the facts and in the circumstances of the case the ITAT erred in law in deleting the addition of ₹ 20,05,744/- being provision for doubtful debt on the ground, that the provision for doubtful debt are doubtful for recovery and therefore cannot be equated with liability, which is contrary to provisions of Section 115JA, by ignoring the finding of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

519) and Hon'ble Supreme Court in dismissing the Appeal filed by the Department against the said decision, in '284 ITR 434(SC)" which is not applicable to the Assessee's case in view of sub-section (4) of Section 115JA of the IT Act? 3. On 30/11/1997, the respondent assessee filed its return of income for the subject assessment year. As the respondent's income, under the normal provisions of the Act, was less than 30 % of its book profits, the Assessing Officer invoked Secti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s to revise book profits and also imposition of interest under Section 234B and 234C of the Act, the respondent assessee filed an appeal to Commissioner of Income Tax (Appeals) (CIT(A)). By an order dated 23/02/2001, the CIT(A) upheld the order of the Assessing Officer on both counts and so far as the adjustment of book profits in terms of explanation (c) to Section 115JA(2) of the Act, it was noted that the provision represented advances made by the respondent assessee to its sister concern and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l to the Tribunal. By the impugned order, the Tribunal held that the provision in respect of doubtful debts is not a liability much less an ascertained liability for the purposes of application of clause (c) of the explanation to Section 115JA(2) of the Act. Thus, the impugned order held that the book profits cannot be increased by ₹ 20.05 lakhs being a provision for doubtful debts to determine book profits in accordance with Section 115JA of the Act. So far as interest payable in respect .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

force during the subject assessment year: Section 115JA.- Deemed income relating to certain companies.'Explanation. - For the purposes of this Section, 'book profit" means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2), as increased by - (a) and (b) xxx xxx xxx (c) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; or (d), (e) and (f) xxx xxx xxx;" .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

akhs under Section 115JA of the Act. (iii) Mr. Bhobe, learned Counsel for the respondent assessee reiterates the findings in the impugned order. (iv) It is very clear from the language of clause (c) of the explanation to Section 115JA(2) of the Act that it only refers to the amount set aside for provisions made for meeting liabilities, which are not ascertained. In the present case, indisputably, the amount of ₹ 20.5 lakhs sought to be added to the book profits, is in fact a provision made .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ow stands concluded in favour of the respondent assesee, by the decisions of the Apex Court in CIT V. HCL Connect Systems and Services Ltd, reported in 305 ITR 405. In this case, the Court, in respect of assessment year 1997-1998 (same in this case), has held that a provision for bad and doubtful debts would not be covered by clause (c) of the explanation to Section 115JA(2) of the Act. This is so because even if debt is not recoverable by an assessee, it cannot become as liability of the assess .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version