Clarification on 115JB

[JOHN SHANNEL]

We made provision for Doubtful debts & Provision for stock for the Ay 10-11 and disallowed the Expenses in MAT & also in Normal Taxation. In AY 11-12 the above said provision has been written off so whether the written off expenses is allowed in MAT and in Normal Taxation. Please clarify.

AI Summary

Tax Expert Clarifies Section 115JB: Provisions for Doubtful Debts and Stock Write-off Impact on MAT Explained A user inquired about the tax treatment under section 115JB for provisions for doubtful debts and stock made in AY 10-11, which were disallowed in both MAT and normal taxation, and subsequently written off in AY 11-12. A tax expert clarified that writing off these provisions would not affect the book profit under MAT, thus they cannot be deducted. Another expert suggested that provisions for stock should be treated as diminution in asset value and that amounts withdrawn and credited to the profit and loss account may be considered under specific tax provisions, advising a review of section 115JB.