REDIFF. COM INDIA LTD, MUMBAI V. ACIT RG 7(2), MUMBAI

ITA 4121/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0747 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: L
• Next Hearing Date: 02-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 22-05-2013
• Court: TRIBUNAL
• Department Lawyers: VIVEK A PERUMPURNA
• Keywords: Retrospective amendment; Bad and doubtful debts
• Section: 115JB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL L , BENCH MUMBAI . . , , BEFORE SHRI R.C.SHARMA , A M & SHRI SANJAY GARG , J M ./ ITA N O. 4120 &4121 / MUM/20 1 3 ( / ASSESSMENT YEAR : 2008 - 09 & 20 0 7 - 08 ) REDIFF.COM INDIA LIMITED, MAHALAXMI ENGG. ESTATE, 1 ST FLOOR, LADY JAMSHEDJI FIRST CROSS ROAD, MAHIM (WEST) , MUMBAI - 400016 VS. ITO RANGE - 7(2) ( 1), MUMBAI ./ ./ PAN/GIR NO. : A A AC R 2762 F ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI JITENDRA JAIN /REVENUE BY : SHRI VIVEK A. PERUMPURNA / DATE OF HEARING : 02 /0 7 / 2015 / DATE OF PRONOUNCEMENT 02/07 /2015 / O R D E R PER R.C.SHARMA (A.M) : TH ESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) , MUMBAI , FOR THE ASSESSMENT YEAR S 2008 - 09 & 200 7 - 08, IN THE MATTER OF ORDER PASSED U/S. 14 3(3) OF THE IT ACT . 2. COMMON GRIEVANCE IN BOTH THE YEARS READS AS UNDER : - THE COMMISSIONER OF INCOME TAX (APPEALS) - VII, MUMBAI [HEREINAFTER REFERRED TO AS THE C I T (APPEALS)] ERRED IN HOLDING THAT THE ASSISTANT COMMISSIONER OF INCOME TAX, RANGE - 7(2), MUM BAI (HEREINAFTER REFERRED TO AS ACIT) WAS RIGHT IN ADDING BACK THE PROVISION FOR DOUBTFUL DEBTS AMOUNTING TO RS 2,20,91,623/ - IN COMPUTING THE BOOK PROFITS UNDER SECTION 115JB ON THE BASIS THAT IT IS A DIMINUTION IN THE VALUE OF ASSET. THE APPELLANTS SUBMI T THAT THE PROVISION FOR DOUBTFUL DEBT IS AN ASCERTAINED LIABILITY AND THEREFORE NEEDS TO BE EXCLUDED IN COMPUTING THE BOOK PROFIT U/S 115JB. ITA NO. 4120 & 4121 /1 3 2 3 . WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT PROVISIONS FOR DOUBTFUL DEBTS ADDED B Y THE AO WAS CONFIRMED BY CIT(A) AFTER HAVING FOLLOWING OBSERVATIONS : - I HAVE CONSIDERED THE APPELLANT'S SUBMISSIONS. BY FINANCE ACT 2009, CLAUSE (I) HAS BEEN INSERTED IN EXPLANATION (1) TO SEC.115JB WITH RETROSPECTIVE EFFECT FROM 1 - 04 - 2001 ACCORDING TO WHICH AMOUNT SET ASIDE AS PROVISION FOR DIMINUTION IN THE VALUE OF ANY ASSET IS REQUIRED TO BE ADDED BACK IN THE BOOK PROFIT COMPUTED AS PER COMPANIES ACT. THE DEBT IS AN ASSET FOR THE APPELLANT AND PROVISION FOR BAD DEBT IS NOTHING BUT PROVISION FOR DIMIN UTION IN THE VALUE OF ASSET (DEBT). THE ADJUSTMENT MADE BY THE AO WAS AS PER PROVISIONS OF THE ACT AND IS THEREFORE UPHELD. 4. LD. AR FAIRLY CONCEDED THAT IN VIEW OF THE AMENDMENT BY FINANCE ACT, 2009, CLAUSE (I) WHICH HAS BEEN INSERTED WITH RETROSPECTIV E EFFECT W.E.F.1 - 4 - 2001, THE AO HAS CORRECTLY ADDED THE PROVISION FOR DOUBTFUL DEBTS IN THE TOTAL INCOME OF THE ASSESSEE WHILE COMPUTING BOOK PROFIT U/S.115JB OF THE IT ACT. 5 . IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 02/07 / 201 5 . SD/ - SD/ - ( ) ( SANJAY GARG ) ( . . ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 16/07 /201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//