2011 (5) TMI 645

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..... adjustment claimed by the assessee as provision for diminution in value of investment was not tenable and the same would be added in the profit which thereby would enhance the book profit u/s 115JB - Decided against the assessee.
ADARSH KUMAR GOEL, AJAY KUMAR MITTAL JJ. JUDGMENT Ajay Kumar Mittal J.- 1. This order shall dispose of I. T. A. Nos. 931 of 2008, 516 and 517 of 2010 as learned counsel for the parties are agreed that the issue raised in all the three appeals is identical and relates to the interpretation of Explanation 1 to section 115JB(2) of the Income-tax Act, 1961 (in short "the Act"). For brevity, the facts are being taken from I. T. A. No. 931 of 2008. 2. This appeal has been preferred by the Revenue under section 2 .....

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..... rch 12, 2007, deleted the adjustment of Rs.91,80,973 made by the Assessing Officer to the book profit under section 115JB of the Act holding that the provision for diminution in value of investments is not a provision for liability, much less a provision for unascertained liability. The said provision does not fall within the purview of clause (c) of Explanation 1 to section 115JB(2) of the Act. Dissatisfied with that order, the Department filed an appeal before the Tribunal. The Tribunal, vide order dated March 27, 2008, upheld the order of the Commissioner of Income-tax (Appeals) in deleting the adjustment of Rs. 91,80,973 made by the Assessing Officer and dismissed the appeal. Feelingaggrieved, the Revenue has approached this court by wa .....

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..... unt or amounts set aside as provision for diminution in the value of any asset, if any amount referred to in clauses (a) to (i) is debited to the profit and loss account, and as reduced by,-. . ." 8. The aforesaid amendment has been made retrospective and is effective from April 1, 2001. The assessment years involved in the instant appeals are subsequent thereto and, therefore, the same governs the present appeals. 9. Accordingly, it is held that the adjustment of Rs. 91,80,973 claimed by the assessee as provision for diminution in value of investment was not tenable and the same would be added in the profit which thereby would enhance the book profit under section 115JB of the Act. Accordingly, the appeals stand allowed.
Case laws, .....

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