AI Drafter 
TaxTMI 
TaxTMI 
2017 (5) TMI 1499
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....ether the findings of the Tribunal are perverse in allowing the foreign exchange fluctuation loss specifically when the same could not be ascertained at the end of the financial year and when the liability was unpid and unquantified? 3. Whether under the facts and circumstances of the case and in law the Tribunal was justified in deleting the disallowance of Rs. 26,21,567/- on account of provision of bad and doubtful debts on the basis that the same was debited in the profit and loss account without there being any evidence on record? 4. Whether the findings of the Tribunal are perverse in allowing the claim of provision of bad debts contrary to Section 36(1)(vii) read with Section 36(2) of the Act? 5. Whether on the facts and circumstances of the case and in law the Tribunal was justified in deleting the disallowance of Rs. 5 lacs incurred on building by holding the same to be of revenue nature?" 2.1 This Court while admitting the appeal No.465/2008 on 05.12.2008 has framed the following substantial questions of law: ""(i) Whether under the facts and circumstances of the case and in law, the Assessing Officer is justified to hold that the amo....
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....3.05 lacs as compared to last year for which necessary details/confirmations have been filed. In the computation sheet the assessee company has claimed deduction u/s 43B towards payment of excise duty amounting to Rs. 2.50 crore on the basis of photo copy of challan enclosed with the return. 3.3. On scrutiny of the challan it is seen that it is deposited under the head miscellaneous and further it has been narrated that the deposit made under the protest in persuasion of investigation being carried out by DGAE, New Delhi. During the course of assessment proceedings, the AR of the assessee brought to notice allowability of Excise duty of Rs. 2.50 crores. IN the circumstances of the case when the DOAE, New Delhi raised the demand during the financial year. Printed booklet was printed on 26.6.98, Tax Audit report was prepared on 24.11.98 but the disputed liability was not find placed in the regular books of accounts. Further it was also brought to notice that the disputed amount also not allowable u/s 43B of the I.T. Act as the same had not disallowed in the earlier years, also has not related to year under consideration. 4. Counsel for the appellant has contended that the view ....
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....80HHC. So Jai Kumar Tejwani appeared on 28.5.2001 and furnished the written submissions vide letter dated 28.5.2001 and explained that the other income should be dealt as per provision of section 80HHC(4A)(baa) of the I.T. Act, 1961 as per the note at point No.2 already submitted vide letter dated 22.5.2001. However, at point No.16 in the letter dated 28.5.2001 in respect of realization under the head common services expenses, it has been submitted that the assessee company recovered a certain amount on agreed terms and conditions and the same are reduced from the total expenses. In support of its conditions photo copies of certain agreements were also enclosed. On perusal of agreement held between assessee company had Gillette diversified operation Pvt. Ltd. (Oral B Division) New Delhi. It is seen that it was for payment of rent of Rs. 21,000/- p.m. against the use of space in officer at Delhi, Bombay and Calcutta, service charges Rs. 359750/- p.m. recovered from GDOP Ltd. (Brawn Division) Looking to the photo copies of Sample agreements it has been observed that the assessee has let out its business premises and incurred other indirect expenses under different heads and it is not....
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....ved under the head other sources and covered by explanation (baa) below section 80HHC(4B) of the IT Act. This rent recovered is to be excluded from the income of the appellant while calculating the deduction u/s 80HHC of the IT Act. Regarding the other agreements for reimbursement of expenses incurred on miscellaneous services it has not been established that they are in the nature of income by way of brokerage, commission and interest etc which are covered by explanation (baa) below section 80HHC(4B) of the IT Act. The AO was therefore not justified in treating the entire receipts of Rs. 1,92,47,604/- on account of recovery of charges for common services as income from other sources such as brokerage, commission, interest and rent for the purposes of computing the deduction u/s 80HHC of the IT Act. The disallowance made on this account of Rs. 1,86,749/- out of the deduction u/s 80HHC of the IT Act is therefore directed to be restricted accordingly. The AO will allow the relief on account of recovery of charges for common services other than the receipts which can be treated as rent." 11. Counsel for the appellant has contended that the Tribunal in spite of specific contention r....
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.... Act, which are certified by the Auditors and pressed by the company in the general meeting. The AO has only the power of examining whether the books of accounts are duly certified by the authorities under the Companies Act and whether such books have been properly maintained in accordance with the Companies Act. The AO does not have the jurisdiction to go beyond the net profit shown in the profit and loss account except to the extent provided in the Explanation. Thereafter, the AO has to make adjustment permissible under the Explanation given in Section 115JA of the 1961 Act. It may be noted, that the adjustments required to be made to the net profit disclosed in the profit and loss account for the purposes of Section 349 of the Companies Act are quite different from the adjustment required to be made under the Explanation to Section 115JA of the 1961 Act. For the purposes of Section 115JA, the AO can increase the net profit determined as per the profit and loss account prepared as per Parts II and III of Schedule VI to the Companies Act only to the extent permissible under the Explanation thereto. 10. As stated above, the said Explanation has provided six items, i.e., It....
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....ade is retrospective with effect from 01.04.1998. Para 4 & 5 of the judgment of Delhi High Court reads as under: "4. The questions with regard to the provision for doubtful debts and provision for doubtful advances have to be answered in favour of the revenue and against the assessee because of the retrospective amendment introduced in Section 115JA of the said Act. By virtue of Finance (No.2) Act, 2009, clause (g) has been inserted in the Explanation contained in Section 115JA (2). By virtue of the said amendment, the amount or amounts set aside as provision for diminution in the value of any asset, is specifically mentioned. The Supreme Court in the case of CIT v. HCL Comnet Systems & Services: 305 ITR 409 held that provision for doubtful debts and doubtful advances did not fall within clause (c) of the said Explanation inasmuch as they amounted to provision in respect of diminution in the value of asset. 5. Now, with the introduction of the said amendment with retrospective effect from 01.04.1998, the provision for doubtful debts and the provision for doubtful advances, which are nothing but provision for diminution in the value of asset, are specifically cover....