TaxTMI 
TaxTMI 
2024 (8) TMI 1120
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....ssioner of Income Tax, Central under section 263 of the Act to the extent prejudicial to the appellant is bad in law and liable to be quashed. 2. Addition of Provision for doubtful debts of Rs. 1.67.51.026 to book profit under section 115JB 2.1. The learned Principal Commissioner of Income Tax, Central, Bangalore erred in concluding that the issue of book profit calculation under section 115JB has not been examined and verified by the AO in the assessment order passed under section 153A dated 25.9.2021 for AY 2017- 18. 2.2. The learned Principal Commissioner of Income Tax, Central, Bangalore erred in concluding that the addition of Provision for doubtful debts of Rs. 1,67,51,026 in computing book profit under sect....
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....ation 1 to section 115JB. The Appellant submits that each of the above grounds/ sub-grounds are independent and without prejudice to one another. The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at, the time of hearing, of the appeal, so as to enable the Income-tax Appellate Tribunal to decide the appeal according to law. The appellant prays accordingly." 2. Brief facts of the case are as under: 2.1. Assessee filed its original return of income for year under consideration on 22/03/2018 declaring total income of Rs. 4,66,38,270/-. The assessment was completed u/s. 153A r.w.s. 143(3) of the act on 25/09/2021. 2.2. Subsequently, the....
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.... income tax officer is unsustainable in law. The assessee placed reliance on the following decisions before the Ld.PCIT in support of the claim that, merely debiting a bad debt to the profit and loss account would not constitute actual write off.; * Hon'ble Supreme Court in case of CIT vs. Vijaya Bank Ltd. reported in TS-120-SC-2010-O dated 15/04/2010 * Hon'ble Karnataka High Court in case of CIT vs. Kirloskar Systems Ltd. reported in TS-587-HC-2013(KAR)-O dated 28/10/2013 * Hon'ble Gujarat High Court in case of CIT vs. Vodafone Essar Gujarat Ltd. reported in TS-5721-HC-2017(Gujarat)-O dated 04/08/2017 * Hon'ble Karnataka High Court in case of CIT vs. Yokogawa India Ltd. reported in TS-5560-HC-2011 dated ....
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.... 3.1. Referring to the financials of the assessee at page 67 being notes to profit and loss account, he submitted that a said amount was debited to profit and loss account note 22 under the head other expenses. Thereafter, referring to page 55 being note 12 to the balance sheet for the year under consideration, the Ld.AR submitted that the said amount was reduced from trade receivables and that what is appearing in the balance sheet net amount. 3.2. He emphasised that Hon'ble Supreme Court in case of HCL Comnet Systems and Services Ltd. reported in (2008) 174 Taxman 118 has observed that the then existing clause (c) did not cover a case where an assessee makes the provision for bad or doubtful debts and with the insertion of clause (i....
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....note that the Ld.PCIT held the assessment order passed u/s. 153A bad in law as the Ld.AO did not consider the provision for bad debts while computing the book profits u/s. 115JB of the act. In observing so, Ld.PCIT relied on the clause (i) of explanation (1) of section 115JB(2) of the act. 4.1. On perusal of the financials of the assessee, having regard to the profit and loss account and the balance sheet, we note that there is a corresponding reduction of Rs. 1,67,51,026/- from the loans and advances on the asset side of the balance sheet and consequently showing the net of provision for bad debt. Hon'ble Supreme Court in case of HCL Comnet Systems and Services Ltd. (supra) has observed that such actual write off would not be hit by cla....