TaxTMI 
TaxTMI 
2021 (3) TMI 669
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....er erred in disallowing TDS paid on License Fees on VISA Cards as per agreement with VISA Card of Rs. 49,36,262/- and Commissioner of Income Tax (Appeals)-4, Mumbai erred in confirming the same. 2) On the facts and circumstances of the case in law the learned Assessing Officer erred in making addition of Rs. 19,30,95,394/- being provision for Card receivable written back while computing book profit under Section 115JB and Commissioner of Income Tax (Appeals)-4, Mumbai erred in confirming the same." 2. The learned counsel for assessee, at the outset, submitted that both the issues are covered in assessee's favor by the decision of this Tribunal in assessee's own case. The copies of the orders have been placed on record. The Ld. CIT-DR, ....
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....sessee. Further, TDS being part of advance income tax would not be an allowable deduction to the assessee since the expenditure could not be said to have been incurred wholly and exclusively for business purposes. In the aforesaid background, the deduction so claimed was denied to the assessee. 5.2 Upon further appeal, Ld. CIT(A), relying upon appellate order for 2015-16 denied deduction of TDS paid for VISA Card payments but allowed deduction of TDS paid for Master card payments. Aggrieved, the assessee is in further appeal before us. 5.3 We find that assessee assailed the appellate order for AY 2015-16 before this Tribunal vide ITA No.6724/Mum/2018 order dated 05/02/2020 wherein the matter was adjudicated as under:- 5. After careful c....
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....ure was nonreimbursable in nature, the same would be an allowable deduction otherwise not. Facts as well as the issue being identical, this issue stand restored back to the file of Ld. CIT(A) with similar directions. The ground stands allowed for statistical purposes. 6. Write-back of provision for Card NPA 6.1 While computing Book Profits u/s. 115JB, the assessee reduced 'provision of card receivables written-back' amounting to Rs. 19.30 Crores. However, the provision for card receivable, in earlier years, was not added back to compute Book Profits for AYs 2007-08 to 2010-11. Therefore, Ld.AO opined that reduction in Book Profits would not be available to the assessee in this year. 6.2 The assessee submitted that write-back represent....
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....ard receivables is concerned, we find that Hon'ble Apex Court has succinctly carved out the fine distinction between debts payable by the assessee vis-à-vis debts receivable by the assessee in the cited case of CIT Vs. HCL Commet Systems & Services Ltd. [305 ITR 409] in the following manner: - As stated above, the said Explanation has provided six items, i.e., Item Nos.(a) to (f) which if debited to the profit and loss account can be added back to the net profit for computing the book profit. In this case, we are concerned with Item No. (c) which refers to the provision for bad and doubtful debt. The provision for bad and doubtful debt can be added back to the net profit only if Item (c) stands attracted. Item (c) deals with amoun....
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....ty. Therefore, in our view Item (c) of the Explanation is not attracted to the facts of the present case. In the circumstances, the AO was not justified in adding back the provision for doubtful debts of Rs. 92,15,187/- under clause (c) of the Explanation to Section 115JA of the 1961 Act. With a view to overcome the same, clause (i) was added to Explanation-1 to Section 115JB with retrospective effect from AY 2001-02 vide Finance (No.2) Act, 2009 which provided that the Book Profits should be increase by the amount set aside as provision for diminution in the value of any asset. It is undisputed fact that the assessee had filed return of income for AY 2007-08 much before the date of the said amendment and therefore, the said amendment co....