9911796707
TMI Blog2008 (1) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 260A of the Income Tax Act, 1961 (in short 'the Act') in Case ITA No. 3962(Del)/2002 for the assessment year 1999-2000 vide which ITAT deleted addition of Rs.4,00,178/- being provision for doubtful debts and addition of Rs.41, 73,107 being provision for damaged stock made by the Assessing Officer to the book profits holding that both the provisions were related to the assets and not any liability and therefore, there was no question of these amounts representing any unascertained liability. 2. Brief facts of this case are that the Assessee filed return of income declaring loss at Rs.5,21,75,080/- though declaring income at Rs.2, 62,30,750/-under Section 115JA of the Act. During the assessment proceedings, it was noticed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. 4. The Revenue filed appeal against the order of CIT(A) before the ITAT and the ITAT deleted addition of Rs.4,00,171/- being provision for doubtful debts and addition of Rs.41,73,107/- being provision for damaged stock made by the Assessing Officer to the book profits holding that both the provisions were related to the assets and not any liability and, therefore, there was no question of these amounts representing any unascertained liability. 5. In this appeal, it is the case of the Revenue that the Assessee could not determine the amount of expired stock before it being expired and the Assessee had not explained as to on what basis provision for bad and doubtful debt was created. The provision for bad and doubtful debt could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck which has exceeded their expiry date as prescribed by the Central Insecticides Board and remain unsold as such. These stocks cannot be sold to the distributors after expiry date and have to be incinerated. The details of stock expired, leaked and received as a shortage which has to be written off have been filed and gone through. These amounts have been written off in the books of accounts which have been prepared as per Part-II and III of Schedule-VI of the Computation of book profit under Section 115JA of the Act and, therefore, the same are to be reduced from the computation under Section 115JA of the Act. 8. The ITAT in the impugned order has held that the Assessing Officer has simply added back these amounts as they were describ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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