TMI Blog2017 (1) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... ar - Held that:- It is the case of the assessee that after the filing of the return of income the provisions of section 115JB was amended to include a new clause(i) in Explanation-1 after sub-section(2) of sub-section with retrospective effect from AY 2001-02 onwards. In view of the amendment, the assessee requested the AO to reduce the book profit by the amount of write backs of ₹ 4,50,000/- being provision for diminution in the value of investment and ₹ 9,53,624/- being provision for diminution in the value of investment and ₹ 9,53,624/- being provision for doubtful debts. It is the case of the assessee that in view of the retrospective amendment book profit declared is required to be reworked. The assessee has relied up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t AY 2008-09 filed return of income declaring total income of Rs.NIL after setting off of the business loss and depreciation under normal provisions of the Act. The book profit of the company was declared at ₹ 45,06,92,683/- under section 115JB of the Act. In the course of scrutiny proceedings, it was noticed by the AO with the assessee had received exempt income during the year. He accordingly, proceeded to disallow expenditure incurred in relation to the exempt income in terms of section 14A of the Act. In terms of Rule 8D(2)(iii) of the IT Rules. The administrative expenses amounting to ₹ 5,68,828/- was computed for disallowance. The book profit under section 115JB of the Act was inflated to this extend by the AO. In the firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and (iv) referred to us in favour of the assessee and against the revenue. The appeal of revenue is dismissed. 7. Seen on the anvil of the aforesaid decision of the Hon ble Gujarat High Court squarely on the issue, we find merit contention on behalf of the assessee and direct the AO to delete the adjustment made on account of estimated disallowance determined under section 14A r.w.Rule 8 D of the I.T.Rules, 1962 while computing book profit under section 115JB of the Act. 8. The second substantive ground of the assessee concerns denial of relief claimed under 115JB towards provisions to write off on account of diminution in the value of investment and bad debts written back during the year as per statement of facts filed before the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amendment, the assessee requested the AO to reduce the book profit by the amount of write backs of ₹ 4,50,000/- being provision for diminution in the value of investment and ₹ 9,53,624/- being provision for diminution in the value of investment and ₹ 9,53,624/- being provision for doubtful debts. It is the case of the assessee that in view of the retrospective amendment book profit declared is required to be reworked. The assessee has relied upon the decision of the Hon ble Coordinate Bench of the Tribunal in the case of Kochi Refineries Ltd. vs. Dy.CIT reported in (2010) 4 ITR (Trib.)) 95 (Mum.). The relevant para of the order of the Coordinate Bench reads as under:- 31. It was the submission of the assessee-couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be presumed, unless provided to the contrary, the provision has been added back while computing the book profits. Hence the provision for bad and doubtful debts withdrawn and credited to the P L a/c has to be excluded from the book profits to be computed under s. 115JB under Expln. (i) thereto. 32. The learned Departmental Representative in reply submitted that the assessee should not be permitted to withdraw the amount when the same was not originally offered to tax and accordingly the AO s orders are correct. He relied on the decision of the Hon ble Delhi High Court in the case of Indo Rama Synthetics (I) Ltd. vs. CIT (2009) 31 DTR (Del) 45 : (2010) 320 ITR 340 (Del) to submit that for the purpose of computing book profit under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication in the assessee s contention in claiming the provision as deduction in the computation of book profit in this year. On the fact that the assessee had been disallowed in that year under the normal computation and by virtue of the amendment now brought with retrospective effect from 1st April, 1998, the provision for bad debt is deemed to have been added back in that year withdrawal and crediting into the P L a/c now results in double taxation. Consequently, the assessee is correct in excluding the amount while computing the income under s. 115JB. Accordingly the ground is allowed. 34. Ground No. 5 pertains to levy of interest under s. 234D of ₹ 2,84,775. Reliance is placed on the Delhi Special Bench decision on ITO vs. Ek ..... X X X X Extracts X X X X X X X X Extracts X X X X
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