9911796707
TMI Blog2018 (12) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ard, since the effect of the Clause (g) in Section 115JA(2) was never considered by the Tribunal, though on the date when the Tribunal took the decision, the said provision has already been inserted with retrospective effect. Therefore, to take a decision on the said fact, the matter has to be necessarily remanded to the assessing officer for fresh consideration. Further, the contention advanced by the learned counsel for the assessee is that even assuming that the proviso is applicable, then the proviso is not unconditional, as it lays down various parameters, which are required to be fulfilled. Decided in favour of the assessee and against the Revenue. - Tax Case (Appeal) No.166 of 2009 - - - Dated:- 12-11-2018 - Mr. Justice T.S. Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, whether the Tribunal was right in law in holding that the amounts provided by the assessee for bad and doubtful debts in the balance sheet of the relevant previous year qualified as reserves. The Hon'ble Supreme Court pointed out that, if the sums set apart in the balance sheet are only provisions , the assessee will not be entitled to the relief claimed by it. If, on the other hand, the sums set apart are reserves within the meaning of the Act, the assessee will be entitled to appropriate relief. The Hon'ble Supreme Court pointed out the finding rendered by the Tribunal to the said fact and while answering the correctness of the decision, held as follows: 14. The High Court has taken the view that the fund created or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nown and existing liability and should be construed as a provision. The question in such cases, is whether the liability was known or anticipated on the date when the balancesheet was prepared. The question is not whether the assessee can anticipate or reasonably anticipate on the date when the balance-sheet was prepared about the bad and doubtful debts . The High Court was in error in surmising that the assessee being a banking company is bound to have bad and doubtful debts. It need not necessarily be so. It is not bound to anticipate on the date of preparation of balance-sheet that all or any of its debts are bound to be bad and doubtful . It all depends upon facts and circumstances. We are of the view that the High Court misun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubtful debt can be added back to the net profit only if Item (c) stands attracted. Item (c) deals with amount(s) set aside as provision made for meeting liabilities, other than ascertained liabilities. The assessee's case would, therefore, fall within the ambit of Item (c) only if the amount is set aside as provision; the provision is made for meeting a liability; and the provision should be for other than ascertained liability, i.e., it should be for an unascertained liability. In other words, all the ingredients should be satisfied to attract Item (c) of the Explanation to Section 115JA. In our view, Item (c) is not attracted. There are two types of debt . A debt payable by the assessee is different from a debt receivable by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther than ascertained liabilities, that is, it should be for an unascertained liability. The aforementioned decision squarely covers the case on hand and the decision relied on by the ITAT in the case of Deputy Commissioner of Income Tax vs. Beardsell Ltd., reported in (2000) 244 ITR 0256, pertains to a case not arising in respect of a banking company. 8. Thus, the decisions of the Hon'ble Supreme Court in State Bank of Patiala (referred supra) and HCL Comnet Systems Services Ltd., (referred supra) are clear answers to both the substantial questions of law, which have been framed for consideration. Thus, we are required to allow the appeal filed by the assessee and answer both the questions in favour of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
