AI Drafter 
TaxTMI 
TaxTMI 
2021 (8) TMI 176
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....ed returns for the Assessment Year 2006-2007 on 04.11.2006 and filed computation of Book Profits under Section 115JB of the Income Tax Act, 1961, (hereinafter referred to as the IT Act). The assessment was also completed under Section 143(3) of the IT Act by an order dated 10.12.2008. 3. After the assessment was completed, the Finance Act, 2009 was amended, wherein, certain amendments were made to Section 115JB of the IT Act with retrospective effect from 01.04.2001. The feeble attempt was made by the Assessing Officer namely the Deputy Commissioner of Income Tax by issuing notice under Section 154 of the IT Act, wherein, it was stated that the assessment order dated 10.12.2008 requires to be amended as there is a mistake apparent from t....
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....as not added to the book profit u/s.115JB based on the Supreme Court in the case of CIT vs HCL Commet Systems & Services Ltd reported in (305) ITR 409. However, based on the latest amendment to the IT Act by the Finance Act 2008 w.r.e.f. 01.04.01, book profit u/s. 115JB requires to be increased by "the amount or amounts set-aside as provision for diminution in the value of any asset", and hence, the provision for bad and doubtful debts to the tune of Rs. 29,35,473/- debited in the P&L A/c requires to be added for the purpose of arriving book profit. In view of the above, I have reason to believe that the income chargeable to tax has escaped assessment within the meaning of section 147 of the I.T. Act, 1961." 7. The peti....
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....n by the Hon'ble Supreme Court in the case of Southern Technologies Limited (320 ITR 577) is examined. The Hon'ble Supreme Court had pronounced the order with relate to Non Banking Finance Companies (NBFCs) and other case law relied were also pronounced in Vijaya Bank case (323 ITR 166). However, the assessee company's business is entirely different from banking business and thus, these decisions would not be applicable. It is also specifically brought to the notice of the assessee that the provision for doubtful debts was added back in regular computation. If the assessee company have a belief that "provision for doubtful debts" had fulfilled the criteria for bad debts to be written off, then the same should have been ....
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....the Hon'ble Supreme Court in Commissioner of Income Tax Vs HCL Comnet Systems & Services Ltd, (2008) 305 ITR 409 and it is thereafter in the following financial year vide Finance Act, 2009, the explanation to Section 115JB of the IT Act was amended to give effect to the decision of the Hon'ble Supreme Court. It is therefore submitted that the assumption of jurisdiction under Section 148 of the IT Act, i.e., after a lapse of four years period was without jurisdiction notwithstanding the fact that section has been amended with effect from 01.04.2001 vide Finance Act, 2009. 10. Defending the impugned order, the learned senior standing counsel for the respondent submits that the assumption of jurisdiction cannot be questioned as the ....
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....d 10.12.2008, the Hon'ble Supreme Court pronounced its judgment on 23.09.2008, wherein, the Hon'ble Supreme Court examined the provisions of Section 115JA of the IT Act, held as under:- "9. From the above, it is evident that the AO has to accept the auathenticity of the accounts maintained in accordance with the provisions of Part II and Part III of Sch.VI to the Companies Act, which are certified by the auditors and pressed (passed) 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 whethere such books have been properly maintained in accordance with the Companies Act. The AO does not have the jurisdic....
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....hould be for an unascertained liability. In other words, all the ingredients should be satisfied to attract item (c) of the Explanation to Section 115JA. In our view, item (c) is not attracted. There are two types of "debt". A debt payable by the assessee is different from a debt receivable by the assessee. A debt is payable by the assessee where the assessee has to pay the amount to others whereas the debt receivable by the assessee is an amount which the assessee has to receive from others. In the present case "debt" under consideration is "debt receivable" by the assessee. The provision for bad and doubtful debt, therefore, is made to cover up the probable diminution in the value of asset, i.e., debt which is an amount receivabl....