TMI Blog2016 (9) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... ng resort to the decision of the Supreme Court in case of Vijaya Bank (supra). In the said decision Supreme Court interpreted explanation(1) to section 36(1)(viii) of the Act which provides that for the purposes of the said clause, any bad debt or part thereof written off as irrecoverable in the accounts of the assessee, shall not include any provision for bad and doubtful debts made in the account of the assessee. The Supreme Court held and observed that said explanation would not govern a situation where there was an actual write off by the assessee in his books in the manner explained in the judgement. Counsel for the assessee would therefore, contend that in the present case also the same legal philosophy would apply and clause(i) of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Indian Petrochemicals Corporation Ltd. (2016 (9) TMI 110 - GUJARAT HIGH COURT) lays down the correct law? - TAX APPEAL NO. 749 of 2012 - - - Dated:- 23-8-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE APPELLANT : MR NITIN K MEHTA, ADVOCATE FOR THE OPPONENT : MR SN SOPARKAR, SR ADVOCATE WITH MR B S SOPARKAR, ADVOCATE ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Issue pertains to effect of insertion of clause (i) to explanation (1) of subsection( 2) of section 115JB of the Income Tax Act, 1961 with effect from 1.4.2001 in computation of assessee's liability under MAT provisions. As per clause (i) of explanation (1), for the purpose of section 115JB, book profit would mean the net ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for the computation of book profit for Section 115JA of the Act since there is no clause which speaks of adding back such provisions for diminution of value of assets. It is not in dispute that such provisions for doubtful debts would be which amount to diminution of value of assets. That being the position, in our opinion the case of the assessee is squarely covered under the clause (g) to explanation to Section 115JA. As already held by Delhi High Court in case of CIT vs. ILPEA Paramount P. Ltd , (supra), the decision of the Apex Court in the case of HCL Comnet Systems and Services Ltd. (supra) cannot be applied in view of change in the statutory provisions with retrospective effect. It is true that the explanatory notes leadi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of the opinion that the Tribunal was justified in confirming the order of CIT(A) deleting the addition. We do not see any reason for interference and therefore we answer the question in favour of assessee and against the revenue. Accordingly, Tax Appeal No. 1775 of 2008 stands dismissed. 3. In the said judgement, Division Bench referred to and relied upon two decisions of Karnataka High Court in case of Commissioner of Income Tax vs. Kirloskar Systems Ltd. reported in [2013] 40 taxmann.com 124 (Karnataka) and in case of Commissioner of Income Tax vs. Yokogawa India Ltd. reported in [2012] 17 taxmann.com 15 (Kar.) Unfortunately, the decision of this Court in case of Deepak Nitrite Limited (supra) was not brought to the notice of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esolve the conflict between above two noted decisions of this Court. 6. Having gone through the judgement of the Supreme Court in case of Vijaya Bank (supra) and decisions of Karnataka High Court in cases of Kirloskar Systems Ltd. (supra) and Yokogawa India Ltd. (supra), we are of the opinion that irresolvable conflict has arisen between the two judgements of Division Benches of this Court which cannot be resolved by having resort to the decision of the Supreme Court in case of Vijaya Bank (supra). In the said decision Supreme Court interpreted explanation(1) to section 36(1)(viii) of the Act which provides that for the purposes of the said clause, any bad debt or part thereof written off as irrecoverable in the accounts of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erpretation of the relevant statutory provisions, would not render the decision in case of Deepak Nitrite Limited (supra) per incuriam . At the same time, the Court in case of Indian Petrochemicals Corporation Ltd. (supra) had not noticed the judgement in case of Deepak Nitrite Limited (supra). 8. In our opinion, therefore, this controversy is required to be resolved by the Larger Bench. 9. Let there be a reference to the Larger Bench to consider the following question : Whether in view of decision of the Supreme Court in case of Vijaya Bank (supra), judgement in case of Deepak Nitrite Limited(supra) was not correctly decided and, therefore, later judgement in case of Indian Petrochemicals Corporation Ltd. (supra) lays down t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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