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 →

COMMISSIONER OF INCOME TAX IV Versus VODAFONE ESSAR GUJARAT LTD

2016 (9) TMI 154 - GUJARAT HIGH COURT

Liability under MAT provisions - 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 - Held that:- Having gone through the judgement of the Supreme Court in case of Vijaya Bank (2010 (4) TMI 46 - SUPREME COURT ) and decisions of Karnataka High Court in cases of Kirloskar Systems Ltd. (2013 (12) TMI 9 - KARNATAKA HIGH COURT ) and Yokogawa India Ltd.(2011 (8) TMI 766 - KARNATAKA HIGH COURT ), we are of the op .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 explanation below subsection( 2) of section 115JB would not come into play. - Undisputedly, the decision of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the Supreme Court in case of Vijaya Bank (supra), whether this Court would have taken a view as was adopted by Deepak Nitrite Limited(supra), is neither possible nor proper on our part to speculate upon. The situation therefore, has arisen where the decision in case of Deepak Nitrite Limited(supra) was rendered without the aid of Supreme Court judgement in case of Vijaya Bank (supra), which though may have some bearing on the interpretation of the relevant statutory provisions, would not rend .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t 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 prov .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion of adding back the provision made towards irrecoverability of bad debts for the purpose of computing book profit, in which it was held that any provision made towards irrecoverability of debts cannot be said to be a provision for liability. The decision of the Supreme Court in case of HCL Comnet Systems and Services Ltd.(supra), was however, rendered when explanation (1) below subsection( 2) of section 115JB did not contain above noticed clause(i) which was introduced by the Finance Act of 2 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

itself had before the Tribunal contended that such provisions for the doubtful debt cannot be added 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 expla .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

any manner take away the fact that by virtue of clause (g) to the explanation, the said decision would no longer apply in the present case since the Apex Court had examined the position from the angle of the existing statutory provisions. 17.0 We are unable to see any demarcation between the provisions which would reduce the value of the assets against a situation where the value of the assets may come down to 'Nil'. In either case there would be diminution in the value of assets. Even .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

0. Similarly, in the case of Yokogawa India Ltd. (supra), the Karnataka High Court has held that while computing book profits, provisions made for bad and doubtful debts cannot be added back in accordance with Explanation (c ) to Section 115JB(1) as same is not an ascertained liability. In that view o the matter, we are 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 ques .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ak Nitrite Limited(supra) was not brought to the notice of the Bench. 4. Having perused both the judgements in cases of Deepak Nitrite Limited(supra) and Indian Petrochemicals Corporation Ltd. (supra), we find that there is a conflict between the two judicial pronouncements between two Division Benches. One takes a view that by virtue of insertion of clause(i) to explanation(1) of subsection( 2) of section 115JB, any provision for bad and doubtful debts would have to be added while computing the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mmissioner of Incometax and another reported in (2010) 323 ITR 166 (SC). He submitted that the question of treatment of a provision for bad and doubtful debts in context of deduction under section 36(1) (vii) of the Act was considered by the Supreme Court in the said case. The statutory provisions in case on hand being similar, the ratio laid down in Vijaya Bank (supra) would apply. This decision of the Supreme Court was not brought to the notice of this Court in case of Deepak Nitrite Limited(s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eme 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 .....

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