TMI Blog2020 (10) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... and not as contribution to any fund, trust, etc., and therefore, in our humble understanding, provisions of sub-section 9 of section 40A are not applicable in the present case and the amount in question is allowable under section 37 and accordingly, this disallowance is deleted and this ground is allowed. MAT Computation - Disallowance u/s 14A r.w.r. 8D(ii) for the purpose of computing book profit under section 115JB - HELD THAT:- Respectfully following this judgment of Vireet Investment (P.) Ltd [ 2017 (6) TMI 1124 - ITAT DELHI] this issue is decided in favour of the assessee. Reversal of provision for bad debts in the present year to be reduced from book profit for the purpose of computing book profit u/s 115JB - Assessee argue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for Assessment Year 2011-12. 2. First, we take up the appeal of the Revenue i.e. ITA No. 1334/Bang/2017. Regarding this appeal, learned DR of the Revenue fairly conceded that the tax effect in this appeal of the Revenue is below ₹ 50 lakhs and therefore, this appeal of the Revenue is not maintainable because of low tax effect as per the latest instructions of CBDT. Accordingly, this appeal of the Revenue is dismissed because of low tax effect. 3. Now, we take up the appeal of the assessee. Ground No. 1 is general, ground No. 2 is as under: 2. That the Learned Commissioner of Income-tax (Appeals) erred in confirming the disallowance under section 40A (9) of the Income-tax Act,1961 and in doing so he failed to appreciate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned DR of the Revenue supported the orders of authorities below. 5. We have considered the rival submissions and we find that the amount in question was paid for the welfare of the employees of the assessee and not as contribution to any fund, trust, etc., and therefore, in our humble understanding, provisions of sub-section 9 of section 40A are not applicable in the present case and the amount in question is allowable under section 37 and accordingly, this disallowance is deleted and this ground is allowed. 6. Ground No. 3 is as under: 3. That the Learned Commissioner of Income-tax (Appeals) erred in confirming the following additions in the computation of Book Profits under section 115JB made by the Assessing Officer and in do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarding disallowance made by the AO under section 14A r.w.r. 8D(ii) for the purpose of computing book profit under section 115JB of the Act. He submitted that in respect of this issue, the order of Special Bench of this Tribunal rendered in the case of Asstt. CIT v. Vireet Investment (P.) Ltd. [2017] 82 taxmann.com 415/165 ITD 27 is applicable as per which this issue was decided in favour of the assessee and he also submitted that copy of the same is available on pages 69 to 138 of the paper book and in particular, our attention was drawn to para 4 of this Tribunal order available on page 78 of the Paper Book and it was pointed out that in this para, it is noted by the Special Bench of the Tribunal that the issue being decided is this as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10. Regarding ground Nos.3 (b) and 3 (c), it was submitted learned AR of the assessee that the authorities below have invoked the provisions of the proviso below clause (i) of explanation 1 to sub-section 2 of section 115JB. He submitted that as per this proviso, clause(i) below explanation 1 of section 115JB (2) will be applicable if the provision was made in an earlier year after 1-4-1997 and the book profit of such year had not been increased by such reserve or provision out of which the amount in question is withdrawn in the present year. He submitted that in the earlier year when the provision was made for Bad Debts, there was no requirement to compute book profit and therefore, it cannot be said that reversal of provision for bad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f creation of provision, it was not added back to book profit. There is no dispute on this factual aspect that in the present case, in the year of creation of provision for Bad Debt, no addition was made in the book profit and its reason may be anything. This is the only argument of learned AR of the assessee that in the year of creation of provision for Bad Debt, book profit was not required to be computed because there was no requirement for such computation and therefore, the Revenue cannot insist in the present year that for this reason alone that there was no addition to book profit in the year of creation of provision, the deduction cannot be allowed in the present year on account of write back of provision but we do not find any meri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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