AI Structured Summary
Not yet generated for this judgment
Judgment
A.S. Venkatachalamoorthy, J.—The assessee had filed his return showing an income of Rs. 16,33,760 and the same was processed u/s
143(1)(a) of the IT Act and an intimation, accepting the income returned, was sent by the Revenue. Thereafter, the said intimation was rectified by
the AO by adding a sum of Rs. 5,93,514 shown as provision for bad and doubtful debts, charged in the P&L a/c, while arriving at the taxable
income, on the basis that the same was not noticed while sending the intimation u/s 143(1)(a), after giving opportunity to the assessee. The
CIT(A)-V. Madras, directed the AO to delete the said addition of Rs. 5,93,514. The Department, being aggrieved by the said order, has
preferred an appeal before the Tribunal, Chennai, which allowed the appeal.
Heard the learned counsel for the appellant as well as the respondent.
The following questions of law have been framed for consideration.
(a) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the provisions for bad and doubtful debts was
not deductible from book profits while computing deduction u/s 115J?
(b) Whether, on the facts and in the circumstances of the case, the Tribunal ought to have appreciated that the provision was towards specific
debts and it is not a contingent liability and hence not includible in book profit computed u/s 115J?
(c) Whether on the facts and in the circumstances of the case the Tribunal was right in holding that addition was a prima facie error rectifiable u/s
154?
If the said amount of Rs 5,93,514 is an ascertained liability, then the said amount cannot be added to the net profit, in view of Section 115J(1A)
As this aspect was not gone into by the AO, we remit the matter back to him to consider the same, giving liberty to the assessee to place
necessary materials The orders of the Tribunal is hereby set aside