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TMI Blog2019 (7) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... ok losses of ₹ 4601.10 Lacs and even after adding back the said provisions as envisaged by the amendment, the resultant figure would have still been a negative figure and the assessee would not have any liability to pay tax u/s 115JB. Therefore, we find substantial force in these arguments raised by Ld. AR before us. As evident from assessment order dated 27/01/2014 of immediately preceding AY 2011-12 that similar treatment given by the assessee to write-back of ₹ 1899.12 Lacs in that year has been accepted by the revenue since no computation of Book Profit has been made in the assessment order. Therefore, following the principle of consistency, the assessee s claim was to be accepted, there being no change in factual matrix. Assessee was entitled for deduction of writeback while computing Book Profits u/s 115JB for the impugned AY. Ground No. 1 stand allowed. - I.T.A. No.4485/Mum/2017, I.T.A. No.4297/Mum/2017 - - - Dated:- 7-5-2019 - Shri Pawan Singh, JM And Shri Manoj Kumar Aggarwal, AM For the Assessee : Shri H.N. Motiwala And Shri Dalpat Shah - Ld. ARs For the Revenue : Shri M.K. Singh - Ld.DR ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even if the provision of ₹ 34,49,82,447/- made for Card receivable was added back in that year there was still a loss of ₹ 11,51,27,737/-. Therefore, the provision made in A/Y:2007-08 should be deemed to have been disallowed in the computation of book profit. The appellant, therefore, submits that when part of the provision made in A/Y: 2007-08 which was deemed to have been disallowed was written back in A/Y:2012-13 the same has to be reduced while computing book profit for A/Y 2012-13. 2.Interest charged u/s 234B. 234C and 234D The said CIT(A) erred in upholding the charge of interest u/s 234B, u/s 234C and u/s 234D when no such interest was chargeable. 3. The appellant craves leave to add, amend, alter, modify, delete and/or change all or any of the above grounds on or before the date of hearing. 2.1 The assessee being non-banking financial company is stated to be engaged in the business of credit card operations and financing payments through credit cards and debit card management. The assessment for impugned AY was framed by Ld. Assistant Commissioner of Income Tax-Circle 2(1)(1), Mumbai [AO] u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010-11 and the same was voluntarily disallowed while computing income under normal provisions. It was pointed out that during all these years, the company was incurring business losses and therefore, the book profits were shown as Nil without making any adjustments u/s 115JB as it would have no impact on the tax liability of the assessee. The attention was also drawn to the fact that Section 115JB was amended by the Finance (No.2) Act, 2009 with retrospective effect from AY 2001-02 in view of the decision of Apex Court rendered in CIT Vs. HCL Commet Systems Services Ltd. [305 ITR 409]. By the amendment, clause (i) was added in Explanation 1 to Section 115JB with retrospective effect from AY 2001- 02. The said clause provided that the book profits were to be increased by the amounts set aside as provision for diminution in the value of any asset. Therefore, by virtue of the retrospective amendment, the aforesaid provisions were deemed to be added back to Book Profits u/s 115JB in all the earlier assessment years. The submissions were supported by the fact that in assessments made u/s 143(3) for earlier years, no working of Book Profit u/s 115JB was made. The provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l debt. The provision for bad and doubtful 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 assessee. A debt is payable by the assessee where the assessee has to pay the amount to others whereas the debt receivable by the assessee is an amount which the assessee has to receive from others. In the present case debt under consideration is debt receivable by the assessee. The provision for bad and doubtful debt, therefore, is made to cover up the probable diminution in the value of asset, i.e., debt whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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