2019 (10) TMI 654

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....r the AY 2007-08. 2. The assessee company name M/s.KEC International Ltd., duly incorporated under the Companies Act, 1956, which is engaged in the business of erection & selling of power transmission towers. The return of income for the AY 2007-08 was filed on 31.10.2007 declaring 'NIL' income and the same was revised declaring same income. Against the said return of income, the assessment came to be completed by the AO vide an order dated 24.12.2009 passed u/s.143(3) of the Income Tax Act, 1961 at 'Nil' income after set off unabsorbed loss of earlier years to an extent of Rs. 42,41,04,258/-. Subsequently, the assessment was re-opened u/s.148 by issuing notice dated 28.03.2012, on the ground that the duty drawback receivables of Rs. 1,8....

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....ut claims disputed by the clients and the provision for doubtful advance of Rs. 3.25 Crs. It is submitted that the provision is debited to P&L A/c and reduced from the sundry debtors, loans and advances which constitutes write off in terms of law laid down by the Hon'ble Supreme Court in the case of Vijaya Bank vs. CIT reported in 323 ITR 166. He also submitted that the provisions netted of against the assets cannot be added to the book profit for the purpose of computing tax liability in the light of the above decision. On the other hand, the Ld.Sr.DR placed reliance on the orders of the lower authorities. 5. We heard the rival contentions and perused the materials placed on record. 6. Ground No.2 challenges the validity of the initi....

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....g valid reasons. On the face of the explanation in respect of Item Nos.1 to 4, no addition is warranted. The disputed tax liability paid under protest does not constitute the income in the hands of the assessee. However, the AO had not gone into the issue in detail by undertaking the due process of verification with the evidence. Similarly, as regards to the duty drawback of Rs. 1,09,56,842/-, the AO had not undertaken the exercise of verifying whether the due drawback had accrued to the assessee or not. Therefore, we are of the considered opinion that the issue may be restored to the file of the AO for de novo assessment on this issue. 9. As regards, the addition of provision for disputed claims to the book profit for the purpose of com....