TaxTMI 
TaxTMI 
Clarification on 115JB
15 Dec 2010 
2 Replies 
1855 Views Asked by
Book profit under Minimum Alternate Tax excludes write offs of earlier provisions, limiting deductions in MAT.
Whether write offs of provisions for doubtful debts and stock affect computation under Minimum Alternate Tax (book profit). One view: MAT is based on book profit, so writing off provisions does not reduce book profit and cannot be deducted. Another view: provisions for diminution in asset value (including stock) when withdrawn and credited to P&L may be considered under the statutory item reducing book profit; section 115JB should be examined with full facts. (AI Summary)
Whether write offs of provisions for doubtful debts and stock affect computation under Minimum Alternate Tax (book profit). One view: MAT is based on book profit, so writing off provisions does not reduce book profit and cannot be deducted. Another view: provisions for diminution in asset value (including stock) when withdrawn and credited to P&L may be considered under the statutory item reducing book profit; section 115JB should be examined with full facts. (AI Summary)
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.