TaxTMI 
TaxTMI 
2021 (12) TMI 1081
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....sessing officer to the book profit u/s. 115JB of the Income Tax Act? (b) Whether the ITAT while passing the impugned order has committed the gross error of law in applying the decision of this Hon'ble Court in case of Vodafone Essar Gujarat Ltd. - (2017) 397 ITR 55 (Guj.) since the assessee in the present case had debited the provision for doubtful debt to the P&L Account under one head (i.e. Administrative and Marketing expense relating to Sundry Debtor) and reduced the corresponding amount from asset under different head (i.e. "Loans and Advances")?" 2. The short facts giving rise to the present Appeal are that the respondent-assessee Company had filed its Return of Income for the Assessment year 2004-05 on 29.10.2004, declaring the total income as 'NIL', after setting off unabsorbed loss and depreciation of Rs. 21,53,66,975/- of the preceding years. The book profits under the provisions of Section 115JB (MAT) was declared at Rs. 19,68,66,005/- after claiming deduction under Section 80HHC of the said Act of Rs. 23,08,865/-. The case of the respondent-assessee having been selected for scrutiny, after granting opportunity of hearing to the respondent assessee, an order ....
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....e said that the provision made for bad and doubtful debt was irrecoverable. The said provision for bad and doubtful debt was not in the nature of sundry debtors. He further submitted that the ITAT had committed an error in applying the decision of the Full Bench in case of CIT versus Vodafone Essar Gujarat Limited in (2017) 397 ITR 55, where the facts were totally different. 4. Learned Advocate Mr. M.J. Shah appearing for the respondent on Caveat drew the attention of the Court to the findings recorded by the ITAT more particularly in para. no. 38 of the impugned order to submit that the assessee had not merely debited the Profit & Loss account and credited the provision for bad and doubtful debts but had simultaneously obliterated such provision from loans and advances on the asset side of the Balance Sheet and therefore, at the end of the year had shown the loans and advances on the asset side of the Balance Sheet as a net of the provision for bad debt, amounting to write off, and such write off was not hit by Clause (i) of the Explanation to Section 115JB, in light of the ratio laid down by the full bench in case of Vodafone Essar Gujarat Limited (supra). 5. Before adverti....
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.... amount of Rs. 377.37 lacs has been written off and not merely provisions. The amount of Rs. 252.37 lacs provisions for bad and doubtful debts has been debited as per the Schedule 17(PB-12) being Administration and Marketing expenses forming part of Profit & Loss Account. The amount has been of Rs. 1313 lacs (PB-10) has been shown in debit side of balance sheet as per schedule-8 of balance sheet showing the loans and advances of balance sheet as on 31.03.2004. Thus, the assessee not merely debiting the Profit and Loss Account and crediting the provision for bad and doubtful debt, but by simultaneously obliterating such provision from its accounts by reducing the corresponding amount from the loans and advances on the asset side of the balance sheet and consequently, at the end of the year showing the loans and advances on the asset side of the balance sheet as net of the provision for bad debt, it would amount to a write off and such actual write off would not be hit by clause (i) of the explanation to Section 115JB, in the light of the above full Bench decision of Hon'ble Gujarat High Court in the case of Vodafone Essar Gujarat Ltd., (supra). Therefore, the case of the assessee is....
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....he parties, or (2) the question is of general public importance, or (3) whether it is an open question in the sense that issue is not settled by pronouncement of this Court or Privy Council or by the Federal Court, or (4) the issue is not free from difficulty, and (5) it calls for a discussion for alternative view. There is no scope for interference by the High Court with a finding recorded when such finding could be treated to be a finding of fact." 8. Again the Supreme Court in case of Vijay Kumar Talwar versus Commissioner of Income Tax in (2011) 330 ITR 1 considered the issue of substantial question in context of Section 260A of the IT Act and observed as under: "18. It is manifest from a bare reading of the Section that an appeal to the High Court from a decision of the Tribunal lies only when a substantial question of law is involved, and where the High Court comes to the conclusion that a substantial question of law arises from the said order, it is mandatory that such question(s) must be formulated. The expression "substantial question of law" is not defined in the Act. Nevertheless, it has acquired a definite connotation through various judicial pronouncements. In....