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COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: , , ,
COUNSEL:
DATE: February 23, 2018 (Date of pronouncement)
DATE: March 8, 2018 (Date of publication)
AY: 1993-94
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CITATION:
S. 143(1)(a): Submission of Dept that decisions of Courts and Tribunals interpreting a provision is to be ignored by the AO will ring the death knell of Rule of law in the Country. It ignores the hierarchical system of jurisprudence in our country. The AO is bound by the views of the Court. Law on s. 36(1)(viii) (Bad debts) explained

“Litera Leges, certainty concept and on the concept that there is no equity on fiscal law irrespective of any judgment of any Hon’ble Court or Tribunal a go by cannot be given to the aforesaid interpretations given in this written submission”.

The above submission that decision of the Court and / or Tribunal interpreting a provision is to be ignored by the Assessing Officer, if accepted will ring the death knell of Rule of law in the country. The Assessing Officer is bound by the views of the Court. The above submission ignores the hierarchal system of jurisprudence in our country.

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COURT:
CORAM: , ,
SECTION(S): ,
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: August 4, 2017 (Date of pronouncement)
DATE: August 16, 2017 (Date of publication)
AY: -
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CITATION:
S. 115JA/ JB Book Profits: Clause (i) to the Explanation was inserted to supersede HCL Comnet 305 ITR 409 (SC). Accordingly, a mere provision for bad debts has to be added back for computation of book profit u/s 115JA/JB. However, in terms of Vijaya Bank 323 ITR 166 (SC), if there is a simultaneous reduction from the loans and advances on the asset side of the balance sheet, the provision amounts to a write-off of the debt which is not hit by clause (i) of the Explanation to section 115JB

By way of culmination of above judicial pronouncements and statutory provisions, the situation that arises is that prior to the introduction of clause(i) to the explanation to section 115JB, as held by the Supreme Court in case of HCL Comnet Systems and Services Ltd. (supra), the then existing clause (c) did not cover a case where the assessee made a provision for bad or doubtful debt. With insertion of clause (i) to the explanation with retrospective effect, any amount or amounts set aside for provision for diminution in the value of the asset made by the assessee, would be added back for computation of book profit under section 115JB of the Act. However, if this was not a mere provision made by the assessee by merely debiting the Profit and Loss Account and crediting the provision for bad and doubtful debt, but by simultaneously obliterating such provision from its accounts by reducing the corresponding amount from the loans and advances on the asset side of the balance sheet and consequently, at the end of the year showing the loans and advances on the asset aside of the balance sheet as net of the provision for bad debt, it would amount to a write off and such actual write off would not be hit by clause (i) of the explanation to section 115JB

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