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TMI Blog2021 (5) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... by the decision of the Hon'ble Agra Tribunal in the case of ACIT vs. Srinivas Synthetics Packers Pvt. Ltd. (22 DTR 562) [Agra Tribunal] which was issued in the context of clause (i) of the Explanation 1 to section 115JB of the Act. 4. In placing reliance on the decision of the Hon'ble Supreme Court in case of Apollo Tyres Ltd. [2002] 255 ITR 273. 5. In levying interest under section 234C of the Income Tax Act, 1961. 6. In initiating penalty proceedings under section 271(1)(c) of the Act. Apropos ground relating to disallowance of Rs. 31,30,20,000/- 3. Brief facts of the case are that the assessee company is engaged in the business of Financial Services as NBFC. The Assessing Officer noted that the assessee has claimed write off bad debt, disallowed in earlier years at Rs. 36,60,10,774/-. Upon the A.O.'s enquiry, the assessee explained that the entire bad debts written off of Rs. 36,60,10,774/- during the year pertains to only one party i.e. Sanghi Industires Limited (SIL). A loan of Rs. 66,60,00,000/- was granted by assessee to SIL in F.Y. 2008-09. Interest accrued on the loan given to SIL was credited to the profit and loss account for the years ended 31.03.2009, 31.03.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 19,98,00,000/- & Rs. 11,32,20,000/- in A.Y. 2009-10 & A.Y. 2010-11 respecively while computing the book profits for respective years, hence while making reversal of such provisions in the year under consideration, reduced the amount of Rs. 36,60,10,774/- from book profits, the amount of Rs. 19,98,00,000/- & Rs. 11,32,20,000/- i.e. total Rs. 31,30,20,000/- is to be added back to Book Profits of the assessee. 5.8 Accordingly, the amount of Rs. 31,30,20,000/- is added back to Book profit u/s. 115JB of the assessee. Penalty proceedings u/s. 271(1)(c) are initiated separately for concealing of income and/or furnishing of inaccurate particulars of income. 6. Against the above order, the assessee appealed before the ld. CIT(A). The ld. CIT(A) found the provision of section 115JB Explanation 1 to be fully applicable. He dislodged the submissions of the assessee as well as reliance upon Agra Bench of ITAT decision, which was found to be in a different context and not applicable. The ld. CIT(A) held as under: 5.5.1 It is clear that the A.O. is bound to compute the book profit in the manner provided in Sec. 115JB and there is no error in the computation of book profit made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of Sect. 115JB is in place from A.Y. 2001-02. The facts in the case of the appellant are different and therefore, the above said decision of the ITAT, Agra Bench, do not help the case of the appellant in any manner. 5.1.4 In view of the above discussion, the addition of Rs. 313,020,000/- made by the A.O. while computing the book profit is upheld. 7. Against the above order, the assessee is in appeal before us. 8. We have heard both the parties and perused the records. 9. The ld. Counsel of the assessee submitted that the authorities below have wrongly invoked the proviso, as the same is applicable when no tax is paid on book profit. The counsel of the assessee further submitted that the assessee has actually paid more taxes. He referred to Board Circular No. 530 dated 01.01.1990. He submitted a computation wherein it was shown that even if the provision were added back to the book profit in concerned assessment year, there would not have been any MAT payable on book profit. As the assessee has paid tax on normal profit, there is no impact. He placed reliance upon the following case laws: 1. Asst. CIT vs. Srinivas Synthetics Packers (P) Ltd. [2009] 122 TTJ 832 (Agra) 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned CIT appeals as well as before us that this exercise in earlier years would have been futile and academic exercise. This was on the reasoning that the impugned amounts when added to the concerned assessment year's book profit would still not have called upon the assessee to pay any tax on the book profit, as the tax payable on normal computation of profits were much higher than the tax on book profits. This contention is duly recorded by the learned CIT appeals in his order. The learned counsel of the assessee has also submitted a chart before us to this effect. 14. The ld.CIT appeals has rejected the aforesaid argument on the premise that the provision of act has to be strictly construed and hence, he has rejected the aforesaid plea of the assessee. We find that the aforesaid view of the learned CIT appeals is not sustainable, if we apply the purposive test of the enactment being considered here. To recapitulate the provision of the act mandates that if assessee writes back provision for bad debt made in appeal years, the deduction of the same from the book profit is permissible if the provision created in the earlier year has been added back to the book profit. In thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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