Indian Kanoon - Search engine for Indian Law

13.4. We note that the in the immediately preceding assessment year (AY 2003-04), identical issue has been decided in favour of the Assessee. The relevant extract of the common order, dated 13.03.2019, passed in ITA No. 4242&4988/MU/2007 for the Assessment Year 2003-04 reads as under:

ITA. No. 5259 & 4895/Mum/2007 Assessment Year: 2004-05 "59. On appraisal of the above said finding ,we find that CIT(A) has decided the issue on the basis of the decision of the case titled as Bharat Earth Movers and Echjay Forgings P. Ltd.

14.1.2. In appeal, CIT(A) granted relief to the Assessee and deleted the addition to Book Profits on account of Provision for Bad and Doubtful Debts by placing reliance on the decision of the Special Bench of the Tribunal in the case of CIT vs. Usha Martin Industries ITA. No. 5259 & 4895/Mum/2007 Assessment Year: 2004-05 Ltd. (2007) 288 (18) ITR 63 (Kol) (SB) and judgment of Hon‟ble Bombay High Court in the case of CIT Vs. Echjay Forgings P. Ltd. (2001) 251 ITR 15 (Bom). The relevant findings of the CIT(A) are as under:

"22.3 I find considerable merit in the submission made by the appellant, since 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 (P) Ltd. (Supra), as well as my own orders in A.Y. 2002-03 & 2003-04 in appeal no. CIT(A)-I/IT/07/05-06 and CIT(A)-

14.2.2. In appeal, CIT(A) granted relief to the Assessee and deleted the addition to Book Profits on account of provision for Wealth-Tax by placing reliance on the decision of the Special Bench of the Tribunal in the case of CIT vs. Usha Martin Industries Ltd. : (2007) 288 (18) ITR 63 (Kol) (SB), judgment of Hon‟ble Bombay High Court in the case of CIT Vs. Echjay Forgings P. Ltd. : (2001) 251 ITR 15 (Bom) and the orders passed by CIT(A) for the Assessment Year 1998-99 and 2003-04.