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TMI Blog2016 (7) TMI 1088X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal. The following questions of law were formulated on June 16, 2011, when the appeal was admitted: "(i) Whether the learned Tribunal below committed substantial error of law in reversing the finding of the Commissioner of Income Tax (Appeals) to the effect that "in computing the book profit for assessment year 2001-02 the provision so debited was not allowed as a deduction and thereby the book of profit under Section 115JB for the year ended 31.03.2001 was increased by the amount of the provisions and in the light of Clause (i) of Explanation to Section 115JB, the amount of Rs. 1,30,53,000/- withdrawn from the provision of diminution in value of investment was required to be released from the net profit to arrive at book of profit und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of Book Profit u/s. 115JB of the Act for the assessment year 2001-02 the said provision for diminution in the value of investment was added back to the Book Profit. In other words, in computing Book Profit for the assessment year 2001-02 no deduction was allowed in respect of provisions made for diminution in the value of investment. Out of the said provision made in the assessment year 2001-02 the assessee wrote back Rs. 1,30,53,000/- in the accounts for the year ended 31.03.2006. clause - (i) of explanation u/s. 115JB(2) provides that the Book Profit shall be reduced by the amount withdrawn from any reserve or provisions, if any such amount is credited to the P&L A/C. In the present case, the assessee created the provision for diminu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be increased by "the amount or amounts set aside as provision for diminution in the value of any asset". He does not dispute that during the year 2000-01 corresponding to the assessment year 2001- 02, the assessee had filed a return showing loss of Rs. 93,17,054/-. He does not also dispute that during the year 2000-01 corresponding to the assessment year 2001-02, the book profit of the assessee was not increased by the sum of Rs. 7,05,73,000/-. But he is interested in contending that he is entitled to the deduction under clause (i) of explanation to section 115JB which provides as follows: "(i) The amount withdrawn from any reserve or provision (excluding a reserve created before the 1st day of April, 1997 otherwise than by way of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid sum of Rs. 7,05,73,000/-. Since book profit was never increased, the question of any deduction on account of any credit from the supposed provision does not arise. Therefore, the view taken by the learned Tribunal, according to us, is the correct view. Mr. Murarka submitted that the legal fiction introduced by the amendment of 2009 has to be taken to its logical conclusion and it may not be permitted to boggle. We are unable to accept this submission. The amendment of 2009 did not create any legal fiction. All that it says is that if any amount of book profit has in fact been increased, corresponding deduction may be availed in future. Since there has been no increase, there is no question of any deduction. For the aforesaid reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X
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