9911796707
TMI Blog2002 (10) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... additions made by the Assessing Officer by way of disallowance of the provision for foreseeable loss on con tract, the provision for bad and doubtful debts and the provision for obsolescence of stores, are not in accordance with the provisions of section 115J ? 2. Whether, on the facts and in the circumstances of the case, cannot the addition in this case be upheld as a prima facie adjustment in accordance with section 143(1)(a) ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the proviso to section 143(1)(a) permits only the disallowance of any loss carried forward, deduction, allowance or relief claimed in the return which on the basis of the information is prima facie inadmis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the officer made two additions : (1) interest on income-tax of Rs. 7,72,421 and (2) provision for foreseeable loss on contract Rs. 60,90,000. As already stated, the amounts are added as per the provisions of the Act mentioned in section 115J of the Act. Section 115J(1A), Explanation (a) of the Act mentions only the amount of income-tax paid or payable. That does not include interest. According to us, the provisions in the Act have to be strictly observed, In so far as interest on income-tax is not mentioned in the section, according to us, this cannot be added under section 115J of the Act. The next is with regard to the provision for foreseeable loss on contract. Section 115J(1A), Explanation (c), of the Act says that the amount or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nution in value of assets, or retained by way of providing for any known liability of which the amount cannot be determined with substantial accuracy. The term "liability" also includes disputed and contingent liabilities. Of the various amounts which can come under the definition of the provision only amounts set aside to provisions made for meeting liabilities other than ascertained liabilities can be added back. We heard learned counsel for the Revenue also. After hearing both sides, we are of the view that the matter requires reconsideration at the hands of the Tribunal. Hence, we hold that the addition of interest on income-tax cannot be added. Further, the matter is remanded regarding the applicability of section 115J(1A), Explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
