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Issues involved: Appeal u/s 260A of the IT Act, 1961 against the order of the Income-tax Appellate Tribunal regarding provision for bad and doubtful debt and depreciation on enhanced value of plant and machinery due to fluctuation in foreign exchange rate.
Provision for Bad and Doubtful Debt: The assessed made a provision for bad and doubtful debt amounting to Rs. 87,26,210. The AO added this amount to the assessed's book profits u/s 115JA of the Act, stating it was not for an ascertained liability. However, the CIT(A) allowed the assessed's appeal, holding that the provision was for an ascertained liability. The Revenue appealed to the Tribunal, which dismissed the appeal, relying on various decisions. The Court noted previous decisions holding that a provision for bad and doubtful debts is a provision for an ascertained liability u/s 115JA, rejecting the Revenue's argument based on subsequent years' write-offs and lack of scientific management policy. Depreciation on Enhanced Value of Plant and Machinery: The second issue concerned the Tribunal allowing depreciation to the assessed on the enhanced value of plant and machinery due to fluctuation in the foreign exchange rate. This issue was decided against the Revenue based on a previous decision of the Court. The Court found no substantial question of law arising and dismissed the appeal. In conclusion, the Court upheld the Tribunal's decision regarding the provision for bad and doubtful debt, emphasizing that it was for an ascertained liability u/s 115JA. The Court also affirmed the Tribunal's decision on allowing depreciation on the enhanced value of plant and machinery, based on a previous ruling. No substantial questions of law were found to arise in either issue, leading to the dismissal of the appeal.
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