9911796707
TMI Blog2019 (7) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue reads as under: - On the facts and in the circumstances of the case and in law the Ld. CIT(A) has erred in allowing the tax deducted on the service charges paid for the services provided by VISA/Master Card International, ignoring the pertinent fact that this payment was not and expenditure in the hands of the assessee and had not incurred for the purpose of the assessee's business and consequently, the TDS paid was not an allowable deduction. The grounds raised by assessee reads as under: - 1.Addition of writeback of Provision for NPA in the computation of book profit u/s115JB. 1.1 The Commissioner of Income Tax (Appeals)-3, Mumbai, erred in upholding the action of the AO in making an addition of Rs. 3,63,37,431/- being prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, submits that when part of the provision made in A/Y: 2007-08 which was deemed to have been disallowed was written back in A/Y:2012-13 the same has to be reduced while computing book profit for A/Y 2012-13. 2.Interest charged u/s 234B. 234C and 234D The said CIT(A) erred in upholding the charge of interest u/s 234B, u/s 234C and u/s 234D when no such interest was chargeable. 3. The appellant craves leave to add, amend, alter, modify, delete and/or change all or any of the above grounds on or before the date of hearing. 2.1 The assessee being non-banking financial company is stated to be engaged in the business of credit card operations and financing payments through credit cards and debit card management. The assessment for impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a the assessee's grievance are that during assessment proceedings, it transpired that the assessee, while computing Book Profits u/s. 115JB, reduced 'Provisions of card receivables w/back' [in short 'write-back'] amounting to Rs. 363.37 Lacs. However, it was noted that the 'Provisions of card receivables' was not added back in the computation of Book Profits u/s 115JB in earlier years i.e. A.Ys. 2007-08 to 2010-11 when the provision was made. Accordingly, the assessee was asked to justify the same. 3.2 The assessee, vide reply dated 27/02/2015, submitted that the aforesaid provision was made during AYs 2007-08 to 2010-11 and the same was voluntarily disallowed while computing income under normal provisions. It was pointed out that during a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, the write-back was rightly deducted while computing Book Profits of the impugned AY. 3.3 However, the aforesaid submissions could not find favor with Ld. AO who opined that since the Book Profits of AYs 2007-08 to 2010-11 were not increased by the provisions, the write-back could not be allowed as deduction in the impugned AY. Resultantly, rejecting the assessee's submissions, the Book Profits were increased to that extent. The stand of Ld. AO, upon confirmation by Ld. first appellate authority, is under appeal before us. 4. The Ld. Authorized Representative for Assessee [AR], drawing our attention to the workings / documents placed in the paper-book, reiterated the submissions as made before Ld. AO and submitted that the write- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made for meeting a liability; and the provision should be for other than ascertained liability, i.e., it should be for an unascertained liability. In other words, all the ingredients should be satisfied to attract Item (c) of the Explanation to Section 115JA. In our view, Item (c) is not attracted. There are two types of "debt". A debt payable by the assessee is different from a debt receivable by the assessee. A debt is payable by the assessee where the assessee has to pay the amount to others whereas the debt receivable by the assessee is an amount which the assessee has to receive from others. In the present case "debt" under consideration is "debt receivable" by the assessee. The provision for bad and doubtful debt, therefore, is made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of Rs. 3449.82 Lacs made in AY 2007-08. Nothing on record controvert the aforesaid fact. We find that in AY 2007-08, the assessee had book losses of Rs. 4601.10 Lacs and even after adding back the said provisions as envisaged by the amendment, the resultant figure would have still been a negative figure and the assessee would not have any liability to pay tax u/s 115JB. Therefore, we find substantial force in these arguments raised by Ld. AR before us. 5.3 Lastly, it is also evident from assessment order dated 27/01/2014 of immediately preceding AY 2011-12 that similar treatment given by the assessee to write-back of Rs. 1899.12 Lacs in that year has been accepted by the revenue since no computation of Book Profit has been made in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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