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TMI Blog2022 (12) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... he profit and loss account and as reduced by . The above amendment was not considered by the Hon ble Supreme Court when it gave its verdict in Commissioner of Income Tax vs. HCL Comnet Systems Services Ltd . [ 2008 (9) TMI 18 - SUPREME COURT] for the Assessment Year 1997-98. The above amendment vide Finance (No.2) Act, 2009 was not relevant for the Assessment year 1997-1998 which fell for consideration. The above decision is therefore not relevant. The Tribunal therefore ought to have examined the issue in the light of the inserted Clause (g) to Explanation Sub-Section 2 to Section 115JA of the Act with effect from 1.4.1998 vide Finance (No.2) Act, 2009 which was relevant for the present case. Therefore, we are of the view that the impugned order deserves to be set aside and the case should be remitted back to the Tribunal to reexamine the issue fresh in the light of the above amendment brought to the definition of Book Profit by Finance (No.2) Act, 2009 with effect from 01.04.1998. Otherwise, the above amendment would be rendered otiose. Therefore, we remit the case back to the Tribunal without answering to the substantial questions of law raised to re-examine the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the value of the assets, i.e. a debt which is an amount receivable by the assessee. Such a provision cannot be said to be a provision for a liability, because even if the debt is not recoverable no liability can be fastened on the assessee. Any provision made towards irrecoverability o a debt cannot be said to be a provision for liability Now therefore the issue stands covered in favour of the assessee. Respectfully following this decision, we decide the issue in favour of the assessee. In the result, the appeal is allowed. 4. The dispute in the present appeal pertain to the assessment year 1998-99. An Assessment under Section 143(3) r/w Section 147 of the Income Tax Act, 1961 (hereinafter referred to as Act ) was passed by the Assessing Officer on 08.03.2005. 5. On perusal of the records, the Commissioner of Income Tax , Chennai opined vide order dated 29.03.2007 under Section 263 of the Income Tax Act that while computing the book profits under Section 115JA, amount towards provision for doubtful advance to an extent of Rs.5,64,13,050/- was not added back to the book profit, while completing the assessment under Section 143(3) r/w 147 on 08.03.2005 by the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmits that the issue is no longer res-integra and is covered by the decision of this Court and that of the Delhi High Court in the following three cases:- i) Commissioner of Income Tax vs. Ilpea Paramount (P) Ltd., (2011) 336 ITR 0054(Del) ii) Commissioner of Income Tax vs. Tamil Nadu Small Industries Development Corporation Ltd., (2015) 57 Taxmann.com 417 (Madras) iii) Eid Parry (India) Limited vs. Assistant Commissioner of Income Tax , (2020) 425 ITR 0508(Mad) 11. It is further submitted that explanation to Section 115 JA (ii) has been amended vide finance (2) Act, 2009 with retrospective effect from 01.04.1998 and therefore on this count alone the impugned order of the Appellate Tribunal is not sustainable. 12. Per contra, the learned counsel for the respondent Assessee submits that in the schedule to the balance sheet following entries were made :- Sundry Debtors Trade 8,764.27/- 10,419,08/- Others (including Export Incentives) 263.68/- 114.68/- Less Provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 30% of its profit, the total income of such assessee chargeable to tax for the relevant previous year shall be deemed to be an amount equal to 30% of such profit. 18. After explanation to after sub-section (2) to Section 115JA of the Act the expression book profit is defined as it stood prior to 1.4.1998. As per the aforesaid Explanation, the expression book profit means the net profit as shown in the profit and loss account for the relevant previous year prepared under Section (2) as increased by a) the amount of income-tax paid or payable, and the provision there for: (b) the amounts carried to any reserves by whatever name called; or (c) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; or (d) the amount by way of provision for losses of subsidiary companies; or (e) the amount or amounts of dividends paid or proposed; or (f) the amount or amounts of expenditure relatable to any income to which any of the provisions of Chapter III applies; if any amount referred to in the above clauses(a) to (f) is debited to the Profit and Loss Account and is reduced by,- i. the amount withdrawn any s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et worth shall have the meaning assigned to it in clause (ga) of sub-section (1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986); or viii. the amount of profits eligible for deduction under section 80HHC, computed under clause (a), (b) or (c) of sub-section (3) or sub-section (3A), as the case may be, of that section, and subject to the conditions specified in sub-sections (4) and (4A) of that section: ix. the amount of profits eligible for deduction under section 80HHE, computed under subsection (3) of that section. 19. Clause(g) was inserted by Finance (No.2) Act, 2009, with effect from 01.04.1998. Similarly, the phrase beginning with if any amount referred to clauses (a) to (f) is debited to the profit and loss account and as reduced by , was substituted with the phrase if any amount referred to clauses (a) to (g) is debited to the profit and loss account and as reduced by . 20. The above amendment was not considered by the Hon ble Supreme Court when it gave its verdict in Commissioner of Income Tax vs. HCL Comnet Systems Services Ltd., (2008) 305 ITR 0409 for the Assessment Year 1997-98. The above amendment vide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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