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TMI Blog2017 (12) TMI 866X X X X Extracts X X X X X X X X Extracts X X X X ..... sidering the smallness of the amount, the court does not deem it fit to enter into the merits of the controversy, and without expressing any opinion on the merits of such ground, leaves it open to the revenue to raise such contention in an appropriate case in future. - Tax Appeal No.882 of 2017 With Tax Appeal No. 883 of 2017 - - - Dated:- 6-12-2017 - MS. HARSHA DEVANI AND MR. A. S. SUPEHIA, JJ. For The Appellant : Mrs Mauna M Bhatt, Advocate ORAL (COMMON) JUDGMENT ( PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. The appellant revenue in these appeals under section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act ) has challenged the common order dated 23.01.2017 made by the Income Tax Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised the book profit determined as per section 115JB(2) of the Act to ₹ 10,23,511/from ₹ 6,82,656/on account of noneligibility of bad debts provision of ₹ 3,40,855/debited in the Profit and Loss account, for which the book profit was omitted to be increased earlier. 4. The assessee went in appeal before the Commissioner (Appeals), who granted the relief to the assessee with regard to the first ground on merits and reversed the decision of the Assessing Officer disallowing the carry forward of unabsorbed depreciation pertaining to assessment year 1998-99 in the reassessment made. The issue regarding adjustment of book profit on account of bad debts of ₹ 3,40,855/was not adjudicated in the absence of such ground bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of ExplanationI( c) to section 115JB would suggest that the aforesaid clause is meant to increase the book profit in respect of provisions towards unascertained liabilities. It is apparent that bad debts reserves is not on account of any provision towards any liability far less unascertained liabilities. The provision, as pleaded by the assessee, is in the nature of amounts set aside for diminution in the value of sundry debtors which is an asset rather than a liability. Therefore, the entire basis for the formation of belief to invoke section 147 is a damp squib. As a Corollary, the reasons recorded are not in sync with section 147 of the Act and are marred by wrong application of law and therefore cannot be sustained. Consequently, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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