TaxTMI 
TaxTMI 
2017 (1) TMI 564
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....ised mainly two-fold objections. The first objection is towards confirming disallowance of Rs. 5,68,828/- out of administrative expenses under section 14A of the Income Tax Act, 1961 (hereinafter referred to as "the Act") read with Rule-8 of the Income Tax Rules, 1962 while computing the book profit under section115JB of the Act. The second objection of the assessee is that the Assessing Officer (AO) has erred in not deducting towards write back of diminution in the value of Rs. 4,50,000/- and bad debts of Rs. 9,53,624/- as credited to Profit & Loss Account while computing the book profit under section 115JB of the Act. 3. Briefly stated, the assessee-company in the relevant AY 2008-09 filed return of income declaring total income of Rs.....
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....the CIT(A). 6. We have carefully considered the rival submissions on the issue involved. The assessee has relied upon the judgement of the Hon'ble Gujarat High Court in the case of Alembic Ltd.(supra). The relevant operative para of the order of the Hon'ble Gujarat High Court is reproduced hereunder:- 8. Taking into consideration the evidence on record and considering the decision of this court in the case of Commissioner of Income-tax-I vs. Gujarat State Fertilizers & Chemicals Ltd. (supra), we are of the opinion that issue Nos. (iii) and (iv) required to be answered in favour of the assessee and against the revenue. In that view of the matter, we answer questions (iii) and (iv) referred to us in favour of the assessee and against th....
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.... debts made in the assessment year which are no longer required amounting to Rs. 9,53,624/- and provision for diminution in investment of Rs. 4,50,000/- reversed during the year and included in the income of the assessee while computing the book profits are required to be deducted. The AO and CIT(A) did not pay need to the request of the Assessee. 9. We have carefully considered the rival submissions. It is the case of the assessee that after the filing of the return of income the provisions of section 115JB was amended to include a new clause(i) in Explanation-1 after sub-section(2) of sub-section with retrospective effect from AY 2001-02 onwards. In view of the amendment, the assessee requested the AO to reduce the book profit by the a....
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....rofit for the asst. yr. 1998-99. On the other hand, by means of Expln. (g) introduced to s. 115JA, by the Finance Act, 2009, w.e.f. 1st April, 1998, the provision made for diminution in value of assets (which includes provision for bad and doubtful debts) has to be added back in computing book profit. Thus, after the amendment by the Finance Act, 2009, the provision made for bad and doubtful debts has to be added back to the book profit and therefore complies with the requirements of the proviso to Expln. (i) to s. 115JB that in the year of making the provision the same has to be added back to the book profits. In view of the statutory provision it has to be presumed, unless provided to the contrary, the provision has been added back while ....
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....vokes the normal provisions of tax, it indirectly means that he has compared the computation under s. 115JA and decided that the income under normal provisions was more. In that situation it is to be presumed that the provision was added back to the book profit of that year. Even by means of Expln. (g) introduced to s. 115JA by the Finance (No. 2) Act, 2009, with retrospective effect from 1st April, 1998 the provision for bad and doubtful debts would be deemed to have been added back in computing the book profit in that year and so the amount, now credited to the P&L a/c, is to be reduced by virtue of the provision of s. 115JB. In view of this there is justification in the assessee's contention in claiming the provision as deduction in the ....