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TMI Blog2002 (10) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... -3. Whether, the Tribunal is right in law in holding that the proviso to section 143(1)(a) permits only the disallowance of any loss carried forward, deduction, allowance or relief claimed in the return which on the basis of the information is prima facie inadmissible ?' the adjustment made in this case is also not within the scope of prima facie disallowance under section 143(1)(a) as clarified by the Central Board in the Circular No. 689, dated August 24, 1994 ?" - The matter requires reconsideration at the hands of the Tribunal. Hence, the addition of interest on income-tax cannot be added. Further, the matter is remanded regarding the applicability of section 115J(1A), Explanations (a) and (c) of the Act to the Tribunal. - - - - - Dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with regard to the same assessee filed against the order of the Tribunal in I. T. A. No. 853 (Coch) of 1995 for the year 1990-91. The assessee is a company registered under the Indian Companies Act. As already stated, I. T. A. No. 212 is preferred by the assessee. The assessment is made as per section 115J of the Income-tax Act (hereinafter referred to as "the Act"). Section 115J of the Act was introduced by the Finance Act, 1987. The section provides that where the total income of a company as computed under this Act in respect of any accounting year is less than thirty per cent. of its book profit, the total income of the company chargeable to tax shall be deemed to be an amount equal to thirty per cent. of such book profit. The section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reciating the fact that the profit and loss statement was drawn up under Schedule VI of the Act. It was further submitted that so far as the provision for foreseeable loss on contract, the Tribunal went wrong in construing that it was only a provision which was contingent in nature and the loss or liability arising therefrom was not ascertained and in these circumstances clause (c) of the Explanation to section 115J of the Act would apply and the same will have to be added back to work out the real quantum of book profit for the purpose of section 115J of the Act. Learned counsel submits that under section 115J(1A), Explanation (c), of the Act, the amount or amounts set aside to provision made for meeting liabilities other than ascertained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal filed by the assessee and held that the additions made by the Assessing Officer by way of disallowance of the provision for foreseeable loss on contract, the provision for bad and doubtful debts and the provisions for obsolescence of stores, are not in accordance with the provisions of section 115J. The Tribunal observed that the question to be considered is whether the three items added back by the Assessing Officer were permissible disallowances under clauses (a) to (ha) of the Explanation to section 115J of the Act. Clause (c) provides that the amount set aside to provisions made for meeting liabilities other than ascertained liabilities could be added back to increase the book profit. But the provisions created by the assessee were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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