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TMI Blog2012 (6) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... ebt is reduced from the loans and advances or the debtors from the assets aside of the balance sheet, the Explanation to Section 115JA or JB is not at all attracted. Hence, CIT(A) has rightly deleted the addition made on aforesaid ground - Decided in favor of assessee - ITA No.1999 /AHD/2008 - - - Dated:- 11-5-2012 - G C Gupta, Anil Chaturvedi, JJ. For Appellant: Shri Kartar Singh, CIT (DR) For Respondent: Shri Dhinal Shah ORDER Per: Anil Chaturvedi: This appeal is filed by the Revenue against the order of CIT(A)- XIV, Ahmedabad dated 25-3-2008 for the Assessment Year 2003-04. 2. The only effective ground raised by the Revenue is as under:- 1. The Ld. CIT (A)-XIV, Ahmedabad has erred in law a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment for the reason that the provision for doubtful debts amounting to ₹ 6,28,14,653/- and provision for contingencies of ₹ 7,34,15,294/- were not added to arrive at the book profits u/s 115JB. The AO completed the assessment u/s 143(3) r.w.s. 147 wherein the book profits was determined at ₹ 73,29,36,653/- and the tax payable as per MAT was determined at ₹ 5,77,18,761/-. 6. Being aggrieved by the order of A.O. the assessee preferred appeal before the Ld. CIT (A). CIT (A) vide order dated 25.3.2008, allowed the appeal of assessee by holding as under:- 4.1. The third ground of appeal relates to addition to the book profit u/s.115JB of the Act. in respect of provision for doubtful debts amounting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the facts of the case and the submission of the appellant. I am in agreement with the views of the appellant. Following the decision in the case of ITAT Calcutta Spl. Bench in the case of Usha Martin, 105 TTJ 550 (Kol), the Delhi High Court s order in the case of HCL Comnet Systems and Services Ltd., supra and Supreme Court s decision in the case of Apollo Tyres, supra, the appellant is allowed relief on this point. 7. Aggrieved by the order of Ld. CIT (A), the Revenue is now in appeal before us. 8. Before us the Ld. D.R. urged and stated that consequent to the amendment brought in the provision of Sec. 115JB by Finance Act, 2009 w.e.f. 1-4-2001, provision for bad debts is to be added while computing book profits u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 115JA and 115-JB(1) are identical. In order to attract the Explanation the debt which is doubtful or bad should satisfy the requirement contemplated in Item (c) of the Explanation. It is the amount or amounts set aside as provisions made for meeting the liability other than the ascertained liabilities. In the instant case also the bad and doubtful debt for which a provision is made which is in the nature of diminution in the value of any asset would not fall within item (c) of Explanation(i). It is in the context the appellate Commissioner as well as the Tribunal has granted relief to the assessee. Realising the fatality of the said argument, it is contended now that item (i) cannot amount to satisfaction as provision for diminishing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sheet and, consequentially, at the end of the year, the figure in the loans and advances or the debtors on the assets side of the balance sheet was shown as net of the provision for the impugned bad debt. Then the said amount representing bad debt or doubtful debt cannot be added in order to compute book profit. Therefore, after the Explanation the assessee is now required not only to debit the profit and loss account but simultaneously also reduce the loans and advances or the debtors from the assets side of the balance sheet to the extent of the corresponding amount so that, at the end of the year, the amount of loans and advances/debtors is shown as net of the provisions for the Impugned bad debt. Therefore, in the first place if the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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