TaxTMI 
TaxTMI 
TaxTMI 
2018 (3) TMI 1919
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....ls)-1, Mumbai [hereinafter referred to as the "CIT(A)"] relevant to the assessment year 2010-11. 3. The assessee has raised the following grounds: - "The appellant objects to the order dated 18 February 2016passed by the Commissioner of Income-lax (Appeals)-1 Mumbai on the following among other grounds: Disallowance of provision for loss on contract 1. The learned Commissioner (Appeals) erred in confirming the disallowance of an amount of Rs. 63,95.102 towards provision for loss on contract. 2. The learned Commissioner (Appeals) erred in not appreciating that provision for loss on contract had been made on (he basis of technical assessment of the individual projects undertaken by the appellant considering the possible cost esc....
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....rovision for estimated loss on contracts. The notice was given to the assessee and after the reply of the assessee, the claim of the assessee to the tune of Rs. 63,95,103/- was disallowed and added to the income of the assessee under normal provision of the Act as well as book profit u/s 115JB of the Act. The assessee has not added back the provision for doubtful debts of Rs. 15,30,51,618/-. This provision was already added back in the computation of total income as per the normal provision of the Act. Therefore, the said provision was also disallowed and added back to the book profit u/s 115JB of the Act and the total income of the assessee was assessed to the tune of Rs. 46,6784,100/- and book profit u/s 115JB of the Act to the tune of Rs....
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.... has challenged the confirmation of the action of the AO in adding back the provision for doubtful debts of Rs. 15,30,51,618/- while computing book profits u/s 115JB of the Act. The Ld. Representative of the assessee has argued that this issue has already been covered by the Hon'ble ITAT in ITA. No.1073/M/2005 dated 18.05.2012. The copy of order in ITA. No.1073/M/2005 dated 18.05.2012 is on the file, we noticed that the similar type of provision i.e., provision for doubtful debts has already been allowed by the Hon'ble ITAT by relied upon the decision of the Hon'ble Supreme Court in the case of Vijaya Bank Vs. CIT, 323 ITR 166 (SC) and in the case of CIT Vs. Yokogawa India Ltd., (2012) 204 Taxman 305 (Kar.). Before going further, we de....
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.... learned Departmental Representative is wrong. 13. After hearing rival contentions, we find that the assessee has debited the Profit & Loss Account by the amount of provisions for doubtful debts / advances. This appears in Schedule-I/Item-4(P) under the head "General Expenses". Thereafter, the assessee has reduced the provisions from the loans and advances appeared in Schedule-I of the Balance Sheet and from sundry debtors appearing in Schedule-G of the balance sheet. The Hon'ble Supreme Court in Vijaya Bank v/s CIT, [2010] 323 ITR 166 (SC), held as follows: - "However, if an assessee debits provision for doubtful debts to the profit and loss account and makes a corresponding credit to the "current liabilities and provisions" on the liabi....
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.... is reduced from the loans and advances or the debtors from the assets side of the balance sheet the Explanation to Section 115JA or JB is not at all attracted. In that context even if amendment which is made retrospective the benefit given by the Tribunal and the appellate Commissioner to the assessee is in no way affected. In that view of the matter, we do not see any merit in this appeal." 7. In view of the finding of the Hon'ble ITAT, we are of the view that the claim of the assessee is liable to be allowed in the interest of justice. No distinguishable material has been produced before us. The factual situation is also not the different of the case decided by Hon'ble ITAT (supra). The claim of the assessee has been decided by the....