TaxTMI 
TaxTMI 
2017 (3) TMI 207
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....e in its Cross Objection can be conveniently disposed off together. These grounds read as follows :- Ground of appeal of the Revenue: "1. That on the facts and in the circumstances of the case Ld. CIT ( Appeals) is not justified and erred in allowing leave encashment of Rs. 13,82,121/- u/s. 43B of the IT Act." Ground of appeal in C.O.No.13/Kol/2011 "1. That on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified and erred in disallowing provision for leave encashment amounting to Rs. 44,57,282/- u/s 43B of the Act." 4. The Assessee is a company. It is engaged in the business of manufacture and sale of metallurgical machinery, materials handling and conveying plant/machinery/spares and coal washing plant on a turnkey contract basis. For A.Y.2006-07 the assessee filed return of income on 28.11.2006 declaring total income of 'Nil 'as per the normal provisions of the Act and book profits as per the provisions of section 115JB of the Income Tax Act, 1961 (Act) at Rs. 5,71,66,526/-. The assessee had debited a sum of Rs. 44,57,282/- in the profit and loss account on account of leave encashment which was outstanding on 31.03.2006. Under the provis....
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....e rival submissions. As far as the ground of appeal of the revenue is concerned, we do not find any merits in the grounds of appeal raised by the revenue. The proviso to section 43B clearly lays down that nothing contained in section 43B(f) shall apply in relation to any sum which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under subsection (1) of section 139 of the Act, in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return. It is no doubt true that the assessee in the present case did not file the evidence regarding payment of Rs. 13,82.121/- before the due date of filing the return of income u/s 139(1) of the Act by the assessee for the relevant assessment year along with the return of income. Nevertheless the assessee had filed the details of payment of leave encashment before the due date of filing the return of income before the due date and the same is placed at page 29 of the assessee's paper book and the same has been given as Annexure-1 to this order. The requirement of furn....
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....on'ble Delhi High Court in the case of CIT vs AIMIL Ltd. & Ors. 229 CTR 418 (Del) wherein it was held that employees' contribution to PF should be allowed as deduction which is paid on or before the due date of filing the return of income u/s 139 of the Act. Aggrieved by the order of CIT(A) the revenue has raised ground no.2 before the Tribunal. 11. At the time of hearing it was brought to our notice that the Hon'ble Calcutta High Court has also taken the view that employees' contribution to PF paid on or before the due date of filing the return of income u/s 139(1) of the Act should be allowed as deduction. In this regard the decision of the Hon'ble Calcutta High Court in the case of M/s. Akzo Nobel India Ltd. Vs CIT in ITA 110 of 2011 order dated 14.06.2016 and in the case of CIT vs Vijayshree Ltd., of the Hon'ble Calcutta High Court in GA No.2607 of 2011 order dated 06.09.2011 was filed before us. In the order in the case of Vijayshree Ltd., (supra), the Hon'ble Calcutta High Court held as follows : "The only issue involved in this appeal is as to whether the deletion of the addition by the Assessing Officer on account of Employees'Contribution to ESI and PF by invoking th....
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....ion, the AO. in the order u/s 143(3) disallowed the expenditure incurred on issue of FCCB on the basis that since the expenses does not represent interest expenses, the same are not allowable. The AO further observed that since FCCBs are convertible into equity share, expenses incurred for such issue is in the nature of capital expenditure and not allowable as deduction in computing Total Income. 16. Before CIT(A) the assessee primarily placed reliance on the decision of the Hon'ble Rajasthan High Court in the case of CIT vs Secure Meters Ltd. (2010) 321 ITR 611 (Raj.) wherein it was held that debentures when issued are loans and whether it is convertible or non convertible does not militate against the nature of the debenture being in the nature of the loan and therefore expenditure incurred would be admissible as revenue expenditure. It was also brought to the notice of CIT(A) that SLP filed by the department against the aforesaid decision of the Hon'ble Rajasthan High Court was rejected. Further reliance was placed on the Hon'ble Mumbai ITAT in the case of Mahindra & Mahindra vs JCIT 36 SOT 348 (Mum) wherein it was held that the expenditure incurred on account of foreign curr....
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....ssed. 21. Ground No.4 raised by the revenue reads as follows :- "4. That on the facts and in the circumstances of the case Ld. CIT ( Appeals) has erred in directing to delete the addition of Rs. 2,15,00,000/-. " 22. The assessee entered into an agreement dated 11.08.1999 with M/s. Hooghly Mills Co.Ltd for purchase of the property owned by M/s. Hooghly Mills Co.Ltd at at Raja Santosh Roy Road, Kolkata. The assessee paid a sum of Rs. 3 crores as advance at the time of the agreement for sale. It is the plea of the assessee that the property in question which was agreed to be purchased by the assessee was a land on which the assessee wanted to construct a building to be used as its office premises. However due to disputes the ultimate sale did not fructify. In full and final settlement, M/s. Hooghly Mills Co.Ltd., refunded only a sum of Rs. 85 lacs, by way of refund of advance paid under the agreement of sale. The assessee thus incurred a loss of Rs. 2,15,00,000/-. The cancellation of the agreement and repayment of Rs. 85 lacs was in the month of May, 2004 and therefore the loss of Rs. 2,15,00,000/- was written off in the books of account and claimed as a deduction while compu....
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....usiness loss and had to be allowed as deduction. Reliance was also placed on the decision of ITAT Mumbai in the case of Pik Pen Pvt. Ltd. Vs ITO in ITA No.6847/Mum/2008 order dated 28.01.2010 laying down the identical proposition. 25. The CIT(A) was of the view that the decisions relied upon by the assessee before him directly supported the plea of the assessee that the loss in question was a loss incidental to the business and was not a capital loss. He therefore held that the disallowance made by the AO cannot be sustained. Aggrieved by the order of CIT(A) the revenue has raised ground no.4 before the Tribunal. 26. We have heard the submissions of the ld. DR, who relied on the order of AO. The ld. Counsel for the assessee relied on the order of CIT(A). 27. We have given a very careful consideration to the rival submissions. We are of the view that order of the CIT(A) does not call for any interference. The decision of the Hon'ble Rajasthan High Court in the case of Anjani Kumar Co. Ltd. (supra) and the decision of ITAT, Mumbai in the case of Pik Pen Pvt. Ltd. (supra) clearly support the conclusions arrived at by CIT(A). As far as the decision of the Hon'ble Supreme Court....
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....hough the assessee follows mercantile system of accounting. The assessee placed reliance on the decision of the Hon'ble Calcutta High Court in the case of CIT vs Simplex Concrete Piles (India)P.Ltd. 179 ITR 8 (Cal) and several other high courts in support of its claim that the sum in question cannot be regarded as income under the normal provisions of the Act. 30. With regard to the claim of the assessee that the said sum cannot also be regarded as part of the book profits u/s 115JB of the Act. The assessee relied on the following decisions :- (i) Bangalore ITAT in the case of Syndicate Bank -vs.- ACIT (2006) 7 SOT 51 (Bang) where it has been held that the entry by way of crediting the profit and loss account in respect of zero coupon bond is of notional credit and not in respect of interest accruing during the year. Hence, even though the same has been credited to profit and loss account, it needs to be excluded while computing the book profit as per Section 115JA. If notional income has been credited to P&L account and the said income has not accrued during the year, the same cannot be considered as "to disclose the result of working of the company during the financial year....
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...., the CIT(A) was of the view that even in the mercantile system of accounting, income cannot be said to have resulted even though the entry might have been made in the books of accounts. In this regard the CIT(A) placed reliance on the decision of the Hon'ble Supreme Court in the case of Shoorji Vallabhdas and Co. 46 ITR 144 (SC). 33. With regard to including the retention money in computing the book profits the CIT(A) held as follows :- "11.9 Whether the above amount needs to be excluded in computing Book Profit u/s 115JB or not, the above issue is only academic as once it is upheld that the income has not accrued to the assessee, the same cannot be brought to tax under the special provisions of Section 115JB of the Act. In a plethora of decisions it has been held that MAT cannot be levied on notional income which has not accrued to the assessee. It can be levied only on real book profits which have been earned by the company. If the notional income has been credited to P&L account and the said income has not accrued during the year, the same cannot be considered as "to disclose the result of working of the company during the financial year as provided under Part-I and Part-....
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....to be excluded from the book profits as laid down in Explanatin-1 to section 115JB(2) of the Act. 37. The ld. Counsel for the assessee while reiterating the plea of the assessee as put forth before CIT(A) further placed reliance on the decisions of the Hon'ble ITAT, Kolkata Bench in the case of DCIT vs Binani Industries Ltd. In ITA NO.144/Kol/2012 for A.Y.2009-10 order dated 02.03.2016 wherein the entire case laws on the issue has been discussed. The Tribunal finally concluded in the aforesaid decision that if the receipt is not in the nature of income then it cannot be considered as income for the purpose of book profit u/s 115JB of the Act. On the other hand if a receipt is considered as income but is exempt by virtue of any specific provision of the Act, then the same would be treated s part of the book profit u/s 115JB of the Act. Thus the ld. Counsel for the assessee submitted that since the retention money in question was not in the nature of income at all it should not be included as part of the book profit u/s 115JB of the Act. 38. We have given a very careful consideration to the rival submissions. As far as the question with regard to excluding the retention money w....
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....y, the income-tax, payable on the total income as computed under this Act in respect of any previous year relevant to the assessment year commencing on or after the 1st day of April,2001, is less than seven and one half percent of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable by the assessee on such total income shall be the amount of income-tax at the rate of seven and one half ten per cent. The Assessee being a company the provisions of Sec.115JB of the Act were applicable. It is also not in dispute that the income tax payable on the total income as computed under the Act in respect of the previous year relevant to AY 2006-07 was less than Seven and one half percent of its book profits and therefore book profit should be deemed to be the total income of the Assessee and tax payable by the Assessee on such total income shall be seven and one half percent of such total income. Every assessee, being a company, shall, for the purposes of this section, prepare its profit and loss account for the relevant previous year in accordance with the provisions of Parts II and III of Schedule VI to the Companies Act, 1956 (1 of 1956....
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....ssessee during the relevant previous year should not be taken into account in computing the profits of the assessee for the assessment year in question. In view of the aforesaid decision of the Hon'ble High Court rendered on identical facts as that of the Assessee's case, there can be no doubt that retention money does not have any character of income. 41. When a receipt is not in the character of income, can it form part of the book profits for the purpose of Sec.115JB of the Act, is the question that arises for consideration. The ITAT Kolkata Bench in the case of Binani Industries Ltd. ITA No.144/Kol/2013 order dated 2.3.2016 reported in (2016) 178 TTJ 0658 (Kol) : (2016) 137 DTR 0185 (Kol)(Trib) had to deal with a case where the question was as to whether receipts on account of forfeiture of share warrants amounting to Rs. 12,65,75,000/-, being a capital receipt, would be liable for taxation u/s 115JB. The tribunal after referring to several decisions on the issue viz., the Hon'ble Apex Court in case of Indo Rama Synthetics (I) Ltd vs CIT 330 ITR 336 (SC), Apollo Tyres Ltd. 255 ITR 273 (SC), Special Bench ITAT in the case of Rain Commodities Ltd. Vs. DCIT (2010) 131 TTJ (Hyd)....
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....count. The Bench followed the decision of the Lucknow Bench in the case of L.H.Sugar Factory Ltd.(supra), where receipts on account of carbon credits which were capital receipts not chargeable to tax and hence not in the nature of income were held not included in the book profits. The Bench also referred to the decision of the Mumbai Bench of the ITAT in the case of Shivalik Venture Pvt. Ltd. (supra) which was a case where the question was whether profits arising on transfer of a capital asset by a company to its wholly owned subsidiary company which is not treated as income" u/s 2(24) of the Act and since it does not form part of the total income u/s.10 of the Act and therefore does not enter into computation provision at all under the normal provisions of the Act, the same should be considered for the purpose of computing book profit u/s 115JB of the Act. The Mumbai Bench held as follows: "26.We shall now examine the scheme of the provisions of sec. 115JB of the Act. It is pertinent to note that the provisions of sec. 10 lists out various types of income, which do not form part of Total income. All those items of receipts shall otherwise fall under the definition of the term "....
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....2(Revenue's appeal) & ITA No.217/Kol/2012 (Assessee's Appeal) A.Y.2007-08 45. ITA No.532/Kol/2012 is an appeal by the revenue while ITA NO.217/Kol/2012 is an appeal by the assessee. Both these appeals are directed against the order dated 30.12.2011 of CIT(A)-I, Kolkata relating to A.Y.2007-08. ITA No.532/Kol/2012 (Revenue's appeal): 46. Ground no.1 raised by the revenue in its appeal and ground no.1 and 1.1 raised by the assessee in its appeal can be conveniently decided together . These grounds are as follows :- Ground of appeal of the Revenue: "1. That on the facts and in the circumstances of the case Ld. CIT(A) was not justified and erred in confirming the addition of an amount of Rs. 18,41,476/- on account of provision for leave encashment u/s43B of the Act. " Grounds of Appeal of the Assessee: 1.0 That on the facts and in the circumstances of the case, the Ld. CIT(Appeals) was not justified and erred in disallowing provision for leave encashment amounting to Rs. 25,29,397/- u/ s 43B of the Act. 1.1 That on the facts and in the circumstances of the case, the Ld. CIT(Appeals) erred in referring the matter relating to the payment made for leave encashment ....
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....he Act amounting to Rs. 3,99,472/-. Sec.194J of the Act is applicable when payment is made by way of fees for professional or technical services rendered. The AO called upon the Assessee to show how corresponding income of Rs. 71,20,701 is shown in the profit and loss account as or under the head fees for professional or technical services. In its reply to the aforesaid query of the AO, the Assessee filed reply dated 08-11-2010 in which the Assessee claimed that receipts from contract credited in profit and loss account amounting to Rs. 4,74,82,22,653/- includes both income from contractors as well as professional services. The A.O., however found that there was only a sum of Rs. 13,95,000/- reflected in the profit and loss account as receipts under the head service charges. The AO while passing the order u/s 143(3) dated 21-12-2010, considered income from service charges amounting to Rs. 13,95,000/- as the only income received from professional services and disallowed balance amount of Rs. 57,25,701/- stating that there was nothing on record to prove that the differential amount of Rs. 57,25,701/- has been duly accounted for in the accounts as income. 52. Before CIT(A), the Ass....
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.... found that TDS certificate from CESC which reflected that they have paid Rs. 70,65,601 to the Assessee as professional charges was in respect of 300 TPH Coal washery at Sarasthali Open Cast Mines having a total contract value of Rs. 1,40,00,000/-. The CIT(A) found that as per the contract with CESC activities like designing and engineering involving technical expertise had to be carried out by the Assessee for which payments tax deduction at source was to be made in terms of Section 194J and not under 194C of the Act. The CIT(A) also found that even though the amount received is on account of designing & engineering the same was credited under the head 'contract sales' by the Assessee and was part of the total contract revenue reflected in the profit and loss account. 54. In respect of the balance income of Rs. 55,100/-, the CIT(A) found that the same has been received by the Assessee from Eastman Crusher Company (P) Ltd. for which copy of the invoice filed by the Assessee showed that the said receipt was on account of design and engineering charges of ball mill against Customer Purchase Order No. 154/VIII: 752V-1:2005:29910. The CIT(A) also found that the said sum was ....
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....and passed an order dated 2.7.2012. In the said order the AO has accepted that the disputed income as shown in the TDS certificate has been included in the contract sales already disclosed by the assessee. The following were the relevant observations of the AO in this regard :- "In respect of credit of income under Service Charges, the A/R produces all the relevant documents wherefrom it is found that the income relating to TDS deducted u/s 194J included in the total turnover which is also verified from the TDS certificates issued by CESC. Hence, the claim of the assessee made before ld. CIT(A) is found correct and accordingly the same is allowed." 58. Since the AO has himself accepted the claim of the assessee, we are of the view that there is no merit in ground no.3 raised by the revenue. As far as ground no.3 raised by the assessee is concerned, in view of the order dated 2.7.2012 passed by the AO, the ground raised by the assessee becomes infructuous and hence dismissed. 59. Ground no.4 raised by the revenue in this appeal read as follows :- "4. That on the facts and in the circumstances of the case the Ld. CIT(A) was not justified and erred while directing the A.O.....
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....Particulars Amount (Rs.) Inter-Corporate advances to McNaeill Engineering (later converted to ODC Carriers Pvt Ltd and ODC Engineering & Constructions Pvt. Ltd) 1,00,00, 000 Interest on inter-corporate deposits given to McNaeill Engineering 27,50,000 Advance for purchase of goods, consumable stores and electrical installation to Jharkhand Steel Trader 1,35,000 Old Government Deposits 55,600 The Assessee claimed the sums as advances written off as allowing deduction while computing the total income as these were incidental to the business and allowable as deduction in terms of Sec. 28 r. w.s. 37(1) of the Act. 65. The AO was of the view that Inter-corporate advance cannot be allowed as deduction because the assessee was not engaged in the business of advancing intercorporate loans and the loss in question does not spring directly from or is not incidental to business of the assessee. The AO further held, as interest on such advances was never shown to have been receivable or receivable from M/s. ODC Carriers Pvt. Ltd., advances written off due to irrecoverability cannot be said to be a business loss. Advance to Jharkhand Steel Traders was d....
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.... the assessee. Loss was allowable if it "sprang directly from and was incidental to" the business of the assessee;" Reliance was further placed on CIT -vs.- Gillanders Arbuthnot & Co. Ltd. (1992) 195 ITR 331 (Cal) wherein it was held that when a subsidiary company receives an advance from its holding company, such advance could be claimed as a loss if it turns out to be bad from the holding company's point of view. 69. It was submitted that names of the parties to whom advances were given along with its purpose and other relevant details pertaining to the same had duly been furnished before the A.O vide letter dated 20~12-2010. It was submitted that when the principal amount is doubtful to be recovered, interest is not required to be booked in the accounts since it is not probable that income would arise to the assessee. Hence, following the principle of prudency, no interest was booked from ODC Carriers. With regard to the Inter corporate deposits/advances it was submitted that these were advances given in the normal course of business. Reliance was placed on the decision of ITAT Hyderabad Bench in the case of ITW Signode Ltd.-vs.-DCIT (2007) 110 TIJ 170 (Hyd) wherein it....
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.... ODC Engineering & Constructions Pvt. Ltd and ODC Carriers Pvt. Ltd., requested their dues to the assessee to be converted into ODCss. The details of the conversion of the amounts originally given as advances to MEL and conversion into ODC is given below : Date Particulars Amount 01-04-2000 Advance given to Mcneil Engineering Ltd. 1,00,00,00 2000-01 Add Interest on above 12,17,788 2000-01 Interest paid 1,12,17,788 3,00,000 2001-02 Add Interest on above 1,09,17,788 12,73,600 2002-03 Add Interest on above 1,21,91,388 16,00,000 (A) 1,37,91,388 2004-05 Advances converted to ODC carriers instead of Mcneill 77,50,000 2004-05 Advances converted to ODC engineering instead of Mcneill 50,00,000 2004-05 Less Interest written off in the books (B) (A)- (B) 10,41,388 1,27,50,000 31-03-2007 Advances written off in the books - ODC Carriers - ODC Engineering 77,50,000 50,00,000 1,27,50,000 74. It is clear from the aforesaid details that the amount in question represented the money given in relation to contracts and had nexus with the business of the assessee.....
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....ue in its appeal in ITA NO.100/Kol/2011 for A.Y.2006-07. For the reasons stated there in while decided the aforesaid ground of appeal we hold that the deduction on account of employees contribution to Provident Fund paid by the assessee on or before the due date of filing the return of income u/s 139(1) of the Act is allowed as deduction. Ground no.2 raised by the assessee is accordingly allowed. 80. Ground No.4 raised by the assessee reads as follows :- "4.0 That on the facts and in the circumstances of the case, the Ld. CIT(Appeals) was not justified and erred in disallowing provision for doubtful debt amounting to Rs. 8,72,921/- as diminution in the value of assets and not considering the same as provision for losses in computing book profit u/ s 115JB of the Act." 81. During the relevant previous year, an amount of Rs. 8,72,921/ - was debited to P&L account on account of provision for doubtful debts. Such provision was duly reduced from the Total Debtors as per Schedule 9 of the Balance Sheet and the net figure of Debtors after reducing such provision was shown in the Annual Accounts. In the return of income, provision for doubtful debts amounting to Rs. 8,72,921/ - wa....
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....ful debts or write off of doubtful debts as bad debts. The CIT(A) has not appreciated the contention of the assessee in this regard in the light of the above question. It is clear from a perusal of the Schedule-9 to the Balance Sheet as well as profit and loss account and debtors on the asset side of the balance sheet that the assessee had in fact written off a sum of Rs. 8,72,921/- as bad debts. In view of the above, the amount in question cannot be considered as provision for doubtful debts which is to be added to the net profit as per the profit and loss account to arrive at the book profit. In other words the sum in question was a bad debt written off which had to be reduced even while arriving at the profit as per profit and loss account and was accordingly reduced. Addition of the said sum to the net profit as per profit and loss account for the purpose of arriving at book profit u/s.115JB of the Act was therefore not warranted. We therefore accept the plea of the assessee in this regard and hold that a sum of Rs. 8,72,921/- be excluded for the purpose of computing book profits u/s 115JB of the Act. 86. In the result the appeal of the assessee is partly allowed. ITA No.....
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....(A) was not justified and erred while directing the A.O. to exclude the amount of retention money of Rs. 45,45,81,644/- in computing total income as well as computing book profit u/s.115JB of the I.T. Act." 93. This ground of appeal is identical to ground no.5 raised by the revenue in A.Y.2006-07 in ITA No.100/Kol/2011. The details of the retention money in this A.Y. are given at page no.29 of the assessee's paper book and the same is given as Annexure-4 to this order. All the other facts and circumstances are identical to the facts and circumstances as it prevailed in A.Y.2006-07. For the reasons stated therein we uphold the order of CIT(A) directing the AO to exclude the amount of retention money while computing the total income as per the normal provisions of the act as well as while computing the book profit u/s115JB of the Act. Ground no.3 raised by the revenue is accordingly dismissed. 94. Ground No.4 raised by the revenue in its appeal and ground no.3. raised by the assessee in its appeal can be conveniently decided together. These grounds of appeal are as follows :- Revenue's appeal: "4. That on the facts and in the circumstances of the case the Ld. CTT(A) was n....
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....pose of arriving at book profits u/s 115JB of the Act. He held that normally the provision for employee's benefit is required to be debited to the P&L account. Hence in order to arrive at correct Book Profit, same is required to be reduced from net profit. The issue was however set aside to the file of A.O. to verify the account of provision made for employee's benefit while computing Book Profit and grant relief accordingly. 97. Aggrieved by the order of the CIT(A) directing the AO to reduce the aforesaid sum for arriving at book profit u/s.115JB of the Act, the revenue has raised ground No.4 before the Tribunal. Aggrieved by the order of the CIT(A) directing the AO to verify the account of provision made fore employee's benefit while computing book profit and grant relief, the Assessee has raised Gr.No.3 in its appeal. 98. We have heard the rival submissions. The learned DR relied on the order of the AO. The learned counsel for the Assessee submitted that expenses incurred on contribution to employees' benefit is a normal allowable business expenditure. It was submitted that as per clause (c) of Explanation (1) of Sec. 115JB of the Act only ascertained liability is ....
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....nts is eligible to be deducted from net profit while computing book profit u/ s 115JB as notes to accounts form part of the P&L a/ c by virtue of Sec. 211(6) of the Companies Act, 1956. 99. At the time of hearing it was brought to our notice that pursuant to the directions of CIT(A) in the impugned order AO passed an order dated 05.07.2012 giving effect to the directions of CIT(A) in which the AO had not accepted the claim of the assessee and made the following observations :- "In respect of disallowance of claim of downward adjustments of Rs. 1,02,88,421/- in the computation of Book of Profit, the direction of Ld. CIT(A) relates to verification on account of provision made for Employees benefit while computing book profit cannot be carried out for giving relief because the amount of Rs. 1,02,88,421/- was excluded by the AO in computing book profit, but there was no scope to verification of Provision from P&L accounts, Ld. CIT(A) did not give order to verify from which angle the provision has to be verified. Hence, no further relief may be allowed against the disallowance of claim." 100. Before us the ld. DR reiterated the stand of the AO as reflected in the assessment ord....
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....tion to PF paid on or before the due date of filing the return of income u/s 139(1) of the Act for the relevant assessment year. Ground no.2 raised by the assessee is accordingly allowed. 105. Ground No.4 raised by the assessee reads as follows :- "4.0 That on the facts and in the circumstances of the case, the Ld. CIT(Appeals) was not justified and erred in disallowing provision for doubtful debt amounting to Rs. 9,34,523/- as diminution in the value of assets and not considering the same as provision for losses in computing book profit u/ s 115JB of the Act." 106. The issue that arises for consideration in the aforesaid ground of appeal is with regard to Disallowance of provision for doubtful debts for the purpose of arriving at book profit u/s.115JB of the Act of Rs. 9,34,523/-. During the relevant previous year an amount of Rs. 9,34,523/ - was debited to P&L account on account of provision for doubtful debts. Such provision was duly reduced from the Total Debtors as per Schedule 8 of the Balance Sheet and the net figure of Debtors after reducing such provision was shown in the Annual Accounts. In the return of income, provision for doubtful debts amounting to Rs. 9,34,523....