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TMI Blog2021 (5) TMI 910X X X X Extracts X X X X X X X X Extracts X X X X ..... x whatsoever had this exercise been done. The explanation invoked by the authorities below is not applicable on the facts of this case. Even for argument sake, we consider the view that there are two views possible, we are of the considered opinion that the view in favour of assessee is on an overwhelming higher side. In this view of the matter, as expounded by the Hon ble Court s Constitution bench in the case of Dilip Gandhi [ 2018 (8) TMI 271 - ITAT MUMBAI] if two views are possible in a statutory tax provisions, the one in favour of the assessee should be adopted. Accordingly, in the background of the aforesaid discussion and precedent, we are of the considered opinion that the order of the ld. CIT(A) is not sustainable. Accordingly, we set aside the order of the ld. CIT(A) and decide the issue in favour of the assessee. Interest u/s.234C - As assessee submitted that interest is leviable on returned income and not on assessed income. That this submission was made but not considered by the ld. CIT(A) - HELD THAT:- Upon careful consideration we find that this issue is consequential, the A.O. shall consider the same as per law. - ITA No.830/Mum/2019 - - - Dated:- 27-5- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orms (NBFC) (Reserve Bank) Directions, 2007 issued by RBI, where an asset has remained overdue for a period of six months or more, the asset shall be classified as a non-performing asset (NPA), a provision was created in the books of accounts of assessee in respect of the loan given to SIL from FY 2008-09 onwards. 4. The A.O. further made the following observation based upon his enquiry and the assessee s reply: i) In F.Y. 2008-09 (A.Y. 2009-10), the assessee had shown Profit/(Loss) before tax at Rs.(16,83,85,897) after debiting Provision for Non Performing Loans at ₹ 19,98,00,000/-. The said amount of ₹ 19,98,00,000/- was added in Computation of Income, however not added back in the book profits. The Book Profit/(Loss) was computed at Rs.(16,84,76,331). ii) In F.Y. 2009-10 (A.Y. 2010-11), the assessee had shown Profit/(Loss) before tax at Rs.(6,57,42,330) after debiting Provision for Non Performing Loans at ₹ 11,32,20,000/-. The said amount of ₹ 11,32,20,000/- was added in Computation of Income, however not added back in the Book Profits. The Book/Profit/(Loss) was computed at Rs.(6,57,42,330). iii) In F.Y. 2010-11 (A.Y.2011-12), the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k the provision for NPA while computing the book profits for A.Y. 2009-10 amounting to ₹ 199,800,000/- and for A.Y. 2010-11 amounting to ₹ 113,220,000/- although it has made a wrong claim to reduce the book profit by including the above said amounts when the provision has been written back and credited to the Profit Loss Account in A.Y. 2013-14. 5.1.2 The Appellant has further submitted that it had inadvertently not added back the provision created for bad and doubtful debts to the book profit u/s. 115JB of the Act in A.Y. 2009-10 and A.Y. 2010-11 and even if the book profit of the appellant were to be revised to add the provision for bad and doubtful debts, the appellant would still fall under the normal provisions of the Act in A.Y. 2009-10and A.Y. 2010-11. Accordingly, there would be no impact on the taxes payable in A.Y. 2009-10 and A.Y. 2010-11. This contention is found to be without merit since the book profit in A.Y. 2013-14 has to be computed in light of the provisions of Sec. 115JB which clearly provides for not allowing the reduction of book profit on account of write back of provision in the year of write back if the provision was not added back in the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in ITA No. 6481/Mum/2016 vide order dated 23.07.2019) 3. UCO Bank vs. CIT 237 ITR 879 10. Per contra, the ld. Departmental Representative (ld. DR for short) relied upon the order of the authorities below. 11. We have carefully considered the submissions and perused the records. As per the undisputed facts in this case, the assessee has claimed write back/off to credit to the profit and loss account of the provision for bad debt amounting to ₹ 36,60,10,774/-, made in earlier year. 12. The assessing officer has invoked the provisions of section 115JB explanation 1 which is reproduced as under: 5.6 As per Explanation (1) of Section 115JB, For the purposes of this section, book profit means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2), .... as reduced by,- (i) the amount withdrawn from any reserve or provision (excluding a reserve created before the 1st day of April, 1997 otherwise than by way of a debit to the profit and loss account), if any such amount is credited to profit and loss account: Provided that where this section is applicable to an assessee in any previous year, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T circular No. 550 (supra) explains that such an action in earlier year should have gone to increase the book profit of the said year. 15. We are of the considered opinion that in this regard if the assessee is not called upon to pay any tax on book profit as taxes on normal computation are higher even after the aforesaid exercise of increase of the book profit by the amount of provision for the concerned year, the exercise would be an empty exercise and revenue neutral. This means that the assessee would not have been called upon to pay any extra tax whatsoever had this exercise been done. The Hon'ble Supreme Court had an occasion to expound in the case of CIT vs. Excel Industries vide order dated 09.10.2013 that when the exercise is revenue neutral, the action on the part of revenue authority is not sustainable. The Hon'ble Apex Court had observed that such an exercise is fruitless (on merits) but also it may not have added anything much to the public coffer. In this case, it is amply clear that such an exercise in earlier year would not have added anything to the public coffer. 16. Hence, from the above it is amply clear that the explanation invoked by the author ..... X X X X Extracts X X X X X X X X Extracts X X X X
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