2018 (6) TMI 1034

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.... (A) erred in law and on facts and in the circumstances of the case in holding that what is 'writing of bad and doubtful debts' and what is 'provision for doubtful debts' was not a debatable issue prior to decision of Hon'ble Supreme Court in case of Vijaya Bank vs. CIT 323 ITR 166, dated 15.4.2010 and therefore, Assessing Officer could pass rectification order u/s. 154 of the Act in respect of this matter. 2) Learned CIT (A) erred in law and on facts and in the circumstances of the case in holding that as the issue that procedure adopted by assessee in respect of bad and doubtful debts tantamount to write off of bad and doubtful debts and therefore eligible for deduction in computation of business income u/s.36 (1) (....

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....s.143(3) of the Act. subsequently an order u/s. 154 of the Act was passed on 13.01.2014 determining the book profits at Rs..9,43,74,290/-. While passing order u/s. 154 of the Act the Assessing Officer disallowed provision for doubtful debts of Rs..85,98,557/- and Income-tax of Rs..3,06,000/-. The Assessing Officer also made adjustment towards carryforward business loss while arriving at the book profits. 4. The assessee carried the matter to the Ld.CIT(A) and contended that the provision for doubtful debts of Rs..85,98,557/- should have been allowed as deduction while computing business income under normal provisions of the Act u/s. 36(1)(vii) of the Act. However, the assessee contended that it did not claim due to the bonafide ignorance o....

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....ssessee that the issue of whether the assessee has made provision for doubtful debts or it tantamount to write off debts is a debatable issue and outside the scope of provisions of section 154 of the Act. 6. Before us Ld. Counsel for the assessee reiterated the submissions made before the lower authorities. Further referring to Page No.20 and 28 of the Paper Book which is the Profit and Loss Account and Schedule 12 i.e. operating, administrative, selling and other expenses, submitted that provision for doubtful debts and advances have been debited to Profit and Loss Account under the head operating, administrative, selling and other expenses thereby reduced the profit of the current year. Ld. Counsel for the assessee further referring the ....

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.... v. Volkart Brothers [82 ITR 50], Learned Counsel for the assessee submitted that the Hon'ble Supreme Court held that a mistake apparent on record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivable be two opinions. 8. Ld. DR vehemently supported the orders of the Ld.CIT(A). 9. We have heard the rival submissions, perused the orders of the authorities below and the case laws relied on. The Hon'ble Supreme Court in the case of Vijaya Bank v. CIT (supra) has explained when the bad debts can be considered as write off in the Books of Accounts. The Hon'ble Supreme Court held that if the bad debts are not only debited to Profi....