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2022 (12) TMI 761 - MADRAS HIGH COURTDeemed income relating to certain companies u/s 115JA - amount towards provision for doubtful advance was not added back to the book profit, while completing the assessment u/s 143(3) r/w 147 - whether provisions of bad and doubtful debt cannot be added by the Assessing Officer vehicle computing book profit u/s 115 JA especially in view of the retrospective amendment to the explanation to Section 115 JA with effect from 01.04.1998 substituted by Finance Act, No.2, 2009? - As submitted that explanation to Section 115 JA (ii) has been amended vide finance (2) Act, 2009 with retrospective effect from 01.04.1998 and therefore on this count alone the impugned order of the Appellate Tribunal is not sustainable - HELD THAT:- Clause(g) was inserted by Finance (No.2) Act, 2009, with effect from 01.04.1998. Similarly, the phrase beginning with “if any amount referred to clauses (a) to (f) is debited to the profit and loss account and as reduced by”, was substituted with the phrase if any amount referred to clauses (a) to (g) is debited to the profit and loss account and as reduced by”. The above amendment was not considered by the Hon’ble Supreme Court when it gave its verdict in Commissioner of Income Tax vs. HCL Comnet Systems & Services Ltd.[2008 (9) TMI 18 - SUPREME COURT]for the Assessment Year 1997-98. The above amendment vide Finance (No.2) Act, 2009 was not relevant for the Assessment year 1997-1998 which fell for consideration. The above decision is therefore not relevant. The Tribunal therefore ought to have examined the issue in the light of the inserted Clause (g) to Explanation Sub-Section 2 to Section 115JA of the Act with effect from 1.4.1998 vide Finance (No.2) Act, 2009 which was relevant for the present case. Therefore, we are of the view that the impugned order deserves to be set aside and the case should be remitted back to the Tribunal to reexamine the issue fresh in the light of the above amendment brought to the definition of” Book Profit” by Finance (No.2) Act, 2009 with effect from 01.04.1998. Otherwise, the above amendment would be rendered otiose. Therefore, we remit the case back to the Tribunal without answering to the substantial questions of law raised to re-examine the issue afresh in the light of the above observation, leaving all issues open to be canvassed by both the appellant and the respondent. Considering the fact that the impugned order pertains to the Assessment Year 1998-99, the Tribunal may endeavour to pass a final order in the denovo proceeding within a period of six months from the date of receipt of a copy of this order.
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