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ISSUE NO. 7:-

30. Under this issue the revenue has challenged the deletion of addition in respect of provision for bad and doubtful debts in computing book profit ITA. No.4242/M/2007 & 4988/M/2007 A.Y. 2003-04 u/s 115JB of the Act in sum of Rs.8,64,03,258/-. Before going further, we deemed it necessary to advert the finding of the CIT(A) on record.: -

"25.3 I find considerable merit in the submission made by the appellant, sicne provision for bad and doubtful debt is diminution in the value of assets and not liability. Further, in my view addition made in computing total income under normal provisions of the Act is not relevant for the purpose of book profit computation u/s 115JB. Therefore, respectfully following the decision of special bench of Kolkata tribunal in the case of Usha Martin Industries Ltd. (supra) the decision of Mumbai High Court in the case of Echjay forgings Ltd. (supra) as well as my won order in appeal no. CIT(A)-I/IT/7/5-6 for AY 2002-03 stated herein above the addition made by the AO in computing book profit u/s 115JB is deleted and this ground of appeal is allowed."

31. On appraisal of the above said finding, we noticed that the CIT(A) has allowed the claim of the assessee on the basis of decision CIT Vs. Usha Martin Industries Ltd. (2007) 288 (AT) ITR 63 (Kol) (SB) and CIT Vs. Echjay Forgings P. Ltd. (2001) 251 ITR 15 (Bom). The addition can only be raised in view of the provision u/s 115JB of the Act and in Explanation to sub section 2. The case of the assessee nowhere fall within the ambit of the said section, therefore, in the said circumstances, the CIT(A) has rightly deleted the said addition, hence, allowed the claim of the assessee. The facts are not distinguishable at this stage also. No contrary law to the law relied by the assessee has been produced before us. Therefore, in the said circumstances, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, this issue is being decided in favour of the assessee against the revenue.

"26.5 On consideration of the submission made by the ARs of the appellant, I find that provision for director's retirement benefit cannot be considered as unascertained liability since the same has been calculated on the basis of actuarial valuation and is squarely covered by the decision of Hon'ble Apex Court in the case of Bharat Earth Movers (supra). Therefore, provision for director's retirement is an allowable deduction in computing profits and gains of business or profession. Further, in my view additions made in computing book profit u/s 115JB on the ground that the same has been added back in the computing total income under normal provisions of the Act is not tenable. Thus, respectfully following the decision of Mumbai High Court in the case of Echjay forgings Ltd. (Supra) and the decision of Hon'ble Tribunal in the appellant own case for AY 1990-91 as well as my own orders for AY 1998-99 and for AY 2002-03 as discussed herein above the addition made by the AO is deleted and this ground of appeal is allowed."

45. On appraisal of the said finding, we noticed that the claim of the assessee has been allowed in view of the decision of Bombay High Court in the case of CIT Vs. Echjay Forgings (P) Ltd. (2001) 251 ITR 15 (Bom) and JCIT Vs. Usha Martin Industries Ltd. (2007) 104 ITD 249 (Kolkata Tribunal) SB. We also noticed that the matter of controversy has been adjudicated by CIT(A) for the A.Y. 1998-99 also and against the said decision, the revenue is not in appeal. It is reiterated that the adjustment can only be made in view of Section 115JB of the Act which has been specified in Explanation to Section 115JB of the Act. In view of the said circumstances, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, this issue is being decided in favour of the assessee against the revenue.