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TMI Blog2016 (6) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Ld CIT(A) was justified in confirming the addition of “Provision for doubtful debts” to the Book profit - Decided against assessee Chargeability of interest u/s 234B of the Act on the addition so made by Ld CIT(A) on the basis of subsequent amendment - Held that:- The various decisions relied upon by the assessee expresses the view that the assessee should be fastened with interest liability in respect of the addition made on the basis of subsequent amendment, since the assessee could not have foreseen the liability at the time of estimating his income for the purpose of payment of advance tax. Hence, we find merit in the additional ground urged by the assessee. Accordingly, we direct the AO not to levy interest u/s 234B of the Act on the addition relating to “Provision for doubtful debts” made while computing book profit u/s 115JB of the Act. - Decided in favour of assessee - I.T.A. No. 5247/Mum/2014 - - - Dated:- 3-6-2016 - Shri B. R. Baskaran (AM) And Ramlal Negi (JM) For the Assessee : Shri Arvind Sonde For the Department : Shri A.K. Srivastava ORDER Per B. R. Baskaran, AM The appeal filed by the assessee is directed against the order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ul debt to the net profit while computing book profit u/s. 115JB of the Act. Aggrieved by the said order, assessee has filed this appeal before us. 5. The Ld Counsel appearing for the assessee challenged the rectification order passed by Ld CIT(A) on several grounds. He submitted that the first rectification order dated 27.3.2014 passed by Ld CIT(A) is barred by limitation, since he has passed the order after expiry of four years from the date of passing of original order. It was submitted that the original order was passed by Ld CIT(A) on 31.10.2008 and hence the first rectification order passed on 27.3.14 was after expiry of four years and hence it is barred by limitation. He further submitted that the Revenue should have filed appeal before the Tribunal, if they felt aggrieved by the order passed by Ld CIT(A). He submitted that the Revenue has circumvented the appellate remedy by filing the rectification petition before the Ld CIT(A). 6. The Ld D.R submitted that the assessing officer has moved the rectification petition on 22.4.2010, i.e., within four years from the date of passing of the order by Ld CIT(A). He submitted that the Ld CIT(A) has taken his own time to pass t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence the Ld CIT(A) was justified in passing the impugned rectification orders. He submitted that this question is no longer a debatable in view of the following decisions:- (a) J.M. Bhatia, AAC Vs. J.M. Shah (1985)(159 ITR 474)(SC) (b) M.K.Venkatachalam Vs. Bombay Dyeing Mfg. Co. Ltd (1958)(34 ITR 143) (c) GTC Industries Ltd Vs. DCIT (2007)(104 ITD 86)(Mum)(TM). 11. The Ld A.R, in the rejoinder, submitted that the Hon ble Supreme Court in the case of J.M.Bhatia, AAC Vs. J.M. Shah did not consider the question as to whether the issue before it was debatable one or not. He further submitted that the AAC, in the case before Hon ble Supreme Court, has passed the order within four years. 12. We heard the parties on this legal issue. We notice that the decision rendered by Hon ble Supreme Court in the case of J.M. Bhatia, AAC Vs. J.M.Shah (supra) answers this question. The head notes of the above said case reads as under:- Section 35(7) of the Wealth Tax Act, 1957 Rectification of mistakes apparent from record- For assessment year 1969-70, AAC by his order dated 26-6-1970 allowed exemption to assessee qua jewellery and ornaments under section 591)(viii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Net profit, while computing book profit u/s 115JB of the Act. He drew support for this proposition from the decision rendered by Hon ble Karnataka High Court in the case of CIT Vs. Yokogawa India Ltd (2012)(204 Taxman 305)(Kar) and CIT Vs. M/s Kriloskar Systems Ltd (ITA No.188/2013 dated 28-10-2013). 14. We heard Ld D.R on this issue and perused the record. We notice that the Hon ble Supreme Court, in the case of Vijaya Bank (supra) has considered the issue whether the accounting treatment given by the assessee would comply with the condition prescribed in sec. 36(1)(vii) of the Act that the debts claimed as bad should have been written in the books as bad. On the facts of that case, the Hon ble Supreme court held that the accounting treatment adopted by the assessee therein complies with the said condition. The decision of Hon ble Supreme Court was rendered in the context of Sec. 36(1)(vii) of the Income tax Act. On the contrary, the Book Profit is computed u/s 115JB of the Act on the basis of accounts prepared under the Companies Act. It is in the knowledge of every one that the accounts are prepared under the Companies Act in accordance with the Principles of Account ..... X X X X Extracts X X X X X X X X Extracts X X X X
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