9911796707
TMI Blog2014 (3) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... urt] followed - the words "gross total income" referred to in section 80P(1) must be given the defined meaning which means total income computed in accordance with the provisions of the Act, but before making any deduction under Chapter VI-A or section 280-O - Computation in accordance with the provisions of the Act must mean computation in accordance with section 29 - the expression "the amount of profits and gains" used in sub-section (2) of section 80P cannot be understood in a different sense - The expression must mean income as computed under section 29 – thus, there is no substantial question of law arises – Decided against Revenue. - ITA 314 & 315/2012 - - - Dated:- 4-3-2014 - S. Ravindra Bhat And R. V. Easwar,JJ. For the Appellant : Mr. N. P. Sahni, Sr. Standing Counsel with Mr. Nitin Gulati, Jr. Standing Counsel. For the Respondent : Mr. Ved Jain, Advocate. ORDER Mr. Justice S. Ravindra Bhat (Open Court) 1. The Revenue claims to be aggrieved by the common order of the Income Tax Appellate Tribunal (ITAT) dated 30.08.2011, allowing the assessee s appeal directed against the Commissioner (Appeals) order; as well as the Revenue s appeal. The que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er are as follows: - 5. Now, coming to the appeal filed by the Revenue, the only issue for consideration relates to deleting the disallowance of Rs.28,75,204/- on account of bad debts. The facts relating to this ground of appeal are that the Assessing Officer during the course of assessment proceedings noted that the assessee had claimed deduction u/s 36 (1) (vii) of the Act in respect of bad debts of Rs.28,75,204/-. On a query raised by the Assessing Officer, it was submitted that the amount of Rs.28,75,204/- was written off under one time settlement scheme of RBI. This amount was not debited to the P L A/c, but was debited to unrealized interest provisions. This deduction was claimed u/s 36 (1) (vii) of the Act. The Assessing officer, however, did not accept the explanation of the assessee. He observed that the assessee had accepted in his computation of income for assessment year 2007-08 that he had debited Rs.28,75,204/- to the provisions created in earlier years and has not debited the same to the P L A/c. Therefore, it was clear that the provision which was created in earlier years were available for such debt. Hence, amount was not in excess of provisions for bad and dou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim for deduction by way of set off in the current year through reversal of the NPA entry could not be allowed. 6. During the course of hearing, the assessee had relied upon the decision of this Court in Commissioner of Income Tax v. Mohan Meakin Ltd. (2012) 18 Taxman 47 (Del); CIT v. Lal Textile Finishing Mills (P) Ltd, 180 ITR 45 and Narayanan Chettiar Industries v. Income Tax Officer, 277 ITR 426. In all these decisions, the various High Courts including the Division Bench of this Court consistently ruled that provision for doubtful debts written back has to be seen in the context of whether the provision had been allowed as deduction in order to determine the taxability at the later point of time of write back. In Mohan Meakin Ltd. matter (supra), this is what the Court stated: - 18. As regards the excess provision for doubtful debts amounting to Rs.17,133/- which has been written back, the finding of the CIT (A) that the provision was never allowed as a deduction in the earlier years. Since the finding that the provision was not allowed in the earlier year as a deduction is not under challenge, the amount cannot be added under Section 41 (1) when it is written bac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the activities listed in Section 80P (2) which is part of the gross total income. In this view, this Court is fortified by the judgment of the Bombay High Court in Commissioner of Income Tax vs. Nagpur Zilla Krishi Audyogik Sahakari Sangh Ltd., (1994) 209 ITR 481 (Bom) where it was held as follows: - 5. A close examination of the above provisions would reveal that treating the original intention at the time of purchase of commodities as the deciding factor is basically erroneous. Section 80P allows, in the computation of the total gross income of the society, a straight deduction in respect of certain types of income to the extent specified. Exempt incomes include (A) the whole of the amount of profits and gains attributable to the activities referred to in clauses (a) (i) to (vii) of subsection (2), (B) limited amount of profits and gains derived from the business other than those specified at clauses (a) (i) to (b), which would include sales even to non-members. All this implies that the society is not disentitled from claiming exemption only because it carries on activities the income from which is not exempt. In that case, by the very nature of things, the purchase of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
