COMMR.OF INCOME TAX-IV,DELHI vs. M/S HCL COMNET SYSTEMS & SERVICES LD

C.A. No.-005800-005800 - 2008Supreme Court23 September 200810 pages
For Petitioner: B. V. BALARAM DASFor Respondent: JAGJIT SINGH CHHABRA
AI SummaryDismissed

What did the Supreme Court hold?

The Supreme Court held that the AO was not justified in adding back the provision for doubtful debts. A provision for doubtful debts receivable is not a provision for a liability, and therefore, clause (c) of the Explanation to Section 115JA was not attracted.

What were the facts?

The Assessing Officer (AO) added back a provision for doubtful debts to the book profits of the assessee under Section 115JA(c) of the Income-tax Act. The assessee was engaged in trading and services, and the provision was made for debts receivable.

What were the issues?

Whether a provision for doubtful debts receivable can be considered a provision for an unascertained liability for the purpose of computing book profits under Section 115JA(c).

Which sections of the Income-tax Act were involved?

Section 115JA

AI-generated summary — verify with the full judgment below

Cited by 118 judgments on BharatTax

See all citing judgments →

Counted from the text of the judgments hosted here. Most recent first.

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Cause title — parties, addresses and appearances
Reportable IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No. 5800 OF 2008 (arising out of S.L.P. (C) No. 4575 of 2008) Commissioner of Income Tax-IV, Delhi … Appellant versus M/s HCL Comnet Systems & Services Ltd. … Respondent

J U D G M E N T S. H. KAPADIA, J.

Leave granted.

The short question which arises for determination in this civil appeal filed by the Department is : whether AO was justified in adding back the provision for doubtful debts of Rs.92,15,187/- to the net profit under clause (c) of the Explanation to Section 115JA of the Income-tax Act, 1961.

In this civil appeal we are concerned with the Assessment Year 1997-98. Assessee-company was engaged in trading in data communication equipment and satellite communication services. During the course of assessment proceedings, the AO found that the assessee had debited an amount of Rs.92,15,187/- on account of bad debts to the ‘profit and loss account’. However, on the ground that it was a provision for bad and doubtful debts, the AO added the aforestated amount to the book profits as per Explanation (c) to Section 115JA

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 115JA

All 209 judgments and leading authorities on Section 115JA →

Recent GST High Court judgments

Search GST case law →