TaxTMI 
TaxTMI 
2021 (2) TMI 1038
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....ntitled to the reduction of the amount of Rs. 7,91,99,195/- credited to the profit and loss account on the account of reversal of provision for bad and doubtful debts under Section 115JB of the Act, on the facts and circumstances of the case? ii) Without prejudice, whether the Tribunal in law failed to take note of the fact of retrospective amendment by Finance (No.2) Act, 2009 with effect from 01.04.2001, by which the computation of book profit as per MAT provisions requires the provision for bad and doubtful debts to be added back and consequently book profits under MAT provisions are to computed for such earlier assessment years in accordance with amended scheme of the Act below ought to have allowed the reduction of Rs. 7,91,99,195/- under proviso to clause (i) of Explanation-I to Section 115JB(2), on the facts and circumstances of the case? iii) Without prejudice, whether the Tribunal in law failed to appreciate that the appellant had added back the provision for bad and doubtful debts for certain years and hence ought to have granted the deduction in respect of reversal of provision for bad and doubtful debts at least to that extent, on the facts and circumstances of the ....
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....,747/- credited to the profit & loss account on account of reversal of provision for bad and doubtful debts under section 115JB of the Act, on the facts and circumstances of the case? (ii) Without prejudice, whether the Tribunal in law failed to take note of the fact of retrospective amendment by Finance (No.2) Act, 2009 with effect from 01.04.2001, by which the computation of book profit as per MAT provisions requires the provision for bad and doubtful debts to be added back and consequently book profits under MAT provisions are to computed for such earlier assessment years in accordance with amended scheme of the Act and further such amended computation ought to form the basis of computation of MAT for the subsequent years and accordingly the authorities below ought to have allowed the reduction of Rs. 14,77,53,747/- under proviso to clause (i) of Explanation 1 to section 115JB(2), on the facts and circumstances of the case? (iii) Without prejudice, whether the Tribunal in law failed to appreciate that the appellant had added back the provision for bad and doubtful debts for certain years and hence ought to have granted the deduction in respect of reversal of provision for ba....
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....n 14A of the Act deserves to be added back while computing book profits under Section 115JB of the Act. In the aforesaid factual background, the assessee has filed this appeal. 4. Learned Senior counsel for the assessee submitted that provision for bad and doubtful debts could not have been added to the net profit by the assessee as the provision under which the same had to be increased was inserted by Finance Act, 2009 with retrospective effect i.e., from 01.04.2001 and the revenue cannot expect the assessee to add back the provisions for doubtful debts to the net profits for the purpose of computation under Section 115JB of the Act in the years prior to insertion of clause (i) to Explanation to Section 115JB of the Act as those years have already elapsed and the assessee cannot give effect to a provision, which was inserted at a later point of time. 5. Alternatively, it is submitted that the assessee could not have added back the provision for doubtful debts to the net profit as even if the same is added to the net profits, the resultant book profit is still negative. It is also contended that though the assessee was prevented from adding back the provision for bad and doubtf....
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.... the Act. It is also argued that any expenditure relatable to earning of income exempt under Section 10(2A) and Section 10(35) of the Act has to be disallowed under Section 14A of the Act and has to be added back to book profit under Section 115JB of the Act. It is further submitted that the view taken by this court in COMMISSIONER OF INCOME TAX, BANGALORE VS. GOKALDAS IMAGES(P) LTD. (2020) 122 TAXMANN.COM 160 (KARNATAKA) requires reconsideration as the disallowance of expenditure in relation to the income referred to in Section 10 of the Act is provided only in Section 14A the Act is not referred to in Clause (f) to Explanation 1 to Section 115JB of the Act, would render the provisions of Section 14A of the Act otiose. 7. It is also argued that in the absence of any provision excluding the applicability of Section 14A of the Act to compute book profit under Section 115JB of the Act, it is implied and unambiguous that the Section 14A of the Act is applicable to computation of book profit under Section 115JB of the Act. In support of aforesaid submission reliance has been placed on 'JOINT COMMISSIONER OF INCOME TAX VS. ROLTA INDIA LTD.' (2011) 330 ITR 470 (SC) and 'MAX....