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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 ..... No.2, 2009. 3. An operative portion of the impugned order of the Tribunal dated 08.05.2009 in I.T.A.No.2144/Mds/2008, reads as under:- After hearing both parties we find that the assessment order was passed in pursuance to the revisionary order passed under Section 263 wherein the Assessing Officer was directed to add provision for doubtful advance to the book profits. The learned Commissioner (A) confirmed the addition on the basis of decision of Hon'ble Madras High Court in the case of DCIT vs. Beardsell Ltd (254 ITR 256). "3. We have carefully considered the rival submissions. We find that now the issue has been decided by the Hon'ble Supreme Court in the case of CIT vs. HCL Comnet systems and Services Ltd. (305 ITR 409). The Hon'ble Apex Court has held as under:- " Item (c) of the Explanation to Section 115JA is not attracted to the provision for bad and doubtful debts. The provision for bad and doubtful debts is made to cover up probable diminution 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 ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the case of DCIV vs. Beardsell Lt., report and in 244 ITR 256 wherein the High Court has held that provision made for doubtful debts is an ascertained liability in terms of Section 115JA and therefore has to be added back to the book profits. Respectfully, following this decision, I uphold the action of the Assessing Officer in implementing the directions of Commissioner of Income Tax . After consideration of all the submissions on all the grounds the appeal is dismissed". 8. Aggrieved by the same, the respondent filed I.T.A.No.2144/Mds/2008 before the Income tax Appellate Tribunal which has culminated in the impugned order dated 08.05.2009 for the Assessment year 1998-99 which has been extracted above. 9. The Revenue is aggrieved by the impugned order dated 08.05.2009 allowing I.T.A.No.2144/Mds/2008 filed by the respondent before the Income Tax Appellate Tribunal. 10. In support of the present appeal, the learned counsel for the appellant submits 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 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) Commissioner of Income Tax vs. Kirloskar Systems Ltd., (2014) 220 Taxman 0001 16. We have given a careful consideration to the facts and circumstances of the case. The dispute in the present case pertains to the Assessment Year 1998-1999. Section 115JA of the Income Tax Act, 1961 deals with deemed income relating to certain companies. 17. As per the aforesaid provision where in the case of an assessee, being a company, the total income , as computed under the Act in respect of the previous year relevant to the Assessment Year commencing on or after 1st day of April 1997, but before the 1st day of April 2001 is less than 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 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (4) of section 80- IA and subject to fulfilling the conditions laid down in that subsection; or vii. the amount of profits of sick industrial company for the assessment year commencing from the assessment year relevant to the previous year in which the said company has become a sick industrial company under subsection (1) of section 17 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) and ending with the assessment year during which the entire net worth of such company becomes equal to or exceeds the accumulated losses. Explanation. For the purposes of this clause, "net 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 ins ..... X X X X Extracts X X X X X X X X Extracts X X X X
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