TaxTMI 
TaxTMI 
2014 (4) TMI 938
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.... in respect of provisions for bad and doubtful debts holding that the provisions are made against the ascertained liability ignoring the fact that explanation to sub-section 2(b) of section 115JA is very clear that the amount carried to any reserve by whatever name called is to be added to the net profit to arrive at the figure of book profit. The Ld. CIT(A) had also confirmed similar additions in earlier years" 2. The appeal of the revenue was decided by this Tribunal vide order dated 9th September 2008 by following the decision of Special Bench, in the case of Joint Commissioner Of Income Tax vs. Usha Martin Industries Ltd (104 ITD 249). The revenue challenged the order of Tribunal before the Hon'ble High Court by filing Income Tax App....
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..... Accordingly we propose to hear and decide this appeal ex-parte. 5. We have heard Ld. DR and carefully perused the relevant material on record. The Ld. DR has relied upon the decision of Hon'ble Delhi High Court in the case of Whirlpool of India Limited and Another Vs. Union of India and Others. (355 ITR 51) and submitted that the issue has been decided by the Hon'ble High Court of Delhi in favour of the revenue and against the assessee. We note that the Hon'ble High Court after considering the various decisions of Hon'ble Supreme Court including the decision in the case of Commissioner of Income-Tax versus HCL Comnet Systems & Services Ltd., (2008) 305 ITR 409(SC) as well as decision of Special Bench of Tribunal in the case of Commissi....
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....profit and initially there was admittedly no provision to add back the provision made in the profit and loss account for diminution in the value of an asset it was wrongly assumed by the tax authorities that a provision for bad and doubtful debts was a provision for meeting an unascertained liability. The true position in law was pointed out by the Supreme Court in its judgment in HCL Comnet (supra), thereafter the legislature stepped in by introducing Clause (i) The reason was to take a lesson out of the judgment of the Supreme Court and to deny the deduction of o provision made not only for bad and doubtful debts but also for the diminution in the value of any asset. It must be recalled that the argument of the companies, accepted by the ....
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....to the WP(C) 3126/2010 Page 41 of 61 broader canvass of Chapter XII B, as we must, it would be difficult to hold that the absence of any provision in Explanation 1 to add back the provision for doubtful debts (on the footing that it was a provision for meeting an ascertained liability) was not an incentive or relief consciously allowed to the zero-tax companies in the same manner in which the relief under Section 80J was allowed The sequitur of this conclusion is that the very weighty observations of A.N. Sen, J, made in the context of Section 80J and the retrospective amendment made by the Finance (No.2)Act, 1980 with effect from 1.4.1972, would be out of place in the context of Chapter XII B of the Income Tax Act. if it is not a benefit d....
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....as been dealt with in the judgment of Supreme Court in National Agricultural Co-operative Marketing Federation of India Ltd. (Supra). The following passage from the judgment is relevant:- WP(C) 3126/2010 Page 56 of 61 - It is hardly likely on the given facts, that assessments had been concluded on the basis of the decision in Kerala Marketing case MANU/SC/2021/1998 : [1998] 231 ITR 814 (SC) and the period for reopening such assessments had become time barred. In any event the 1998 amendment cannot be construed as authorizing the revenue authorities to reopen assessments when the reopening is already barred by limitation. The amendment does not seek to touch on the periods of limitation provided ....