SUMMIT SECURITIES LTD,MUMBAI vs. ADDL CIT RG 8(2), MUMBAI

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ITA 2336/MUM/2012Status: DisposedITAT Mumbai05 October 2020AY 2005-064 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the provision for foreseeable losses was a fair, proper, and justified claim. Therefore, it could not be considered an unascertained liability for the purpose of computing book profits under Section 115JB.

What were the facts?

The assessee had made a provision for project losses. The Assessing Officer disallowed this provision while computing income under normal provisions and book profits under Section 115JB. The CIT(A) confirmed this disallowance.

What were the issues?

Whether a provision for foreseeable losses is allowable in the computation of book profits under Section 115JB of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 115JB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” BENCH, MUMBAI

Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Appellant: Shri Ronak Doshi-Ld.AR
For Respondent: Shri Manjunatha Swamy-Ld. CIT DR

आयकर अपील सं./ (िनधा"रण वष" / Assessment Year:2005-06) Summit Securities Ltd. Add. CIT-8(3) [Formerly known as KEC Inf. Ltd.) Aaykar Bhavan बनाम/ 213, Bezzola Complex Mumbai. Vs. B-Wing, Sion-Trombay Road Chembur, Mumbai – 400 071 "थायीलेखासं./जीआइआरसं./PAN/GIR No. AAACK-4279-J (अपीलाथ"/Appellant) (""थ" / Respondent) : Assessee by : Shri Ronak Doshi-Ld.AR Revenue by : Shri Manjunatha Swamy-Ld. CIT DR सुनवाई की तारीख/ : 05/10/2020 Date of Hearing घोषणा की तारीख / : 05/10/2020 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. The aforesaid appeal is a recalled matter for limited purpose of adjudicating ground no. 4 since the appeal was earlier disposed-off vide Tribunal order dated 01/03/2018. However, it was pointed out by the assessee vide MA No. 582/Mum/2018 that Ground No. 4 of the appeal remained to be adjudicated. The application was accepted by the Tribunal vide order dated 13/11/2019 wherein the order was recalled for 2 Summit Securities Ltd. Assessment Year :2005-06 the limited purpose of adjudicating Ground No.4. Accordingly, the appeal has come up for hearing before this bench. We have carefully heard the submissions made by rival representatives.

2.

The Ground No. 4 which require our adjudication read as under: - 4. Disallowance of Provision on Foreseeable Losses Under Section 115JB of the Act:

1. 1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in confirming the action of the AO of disallowing the provision for project losses of Rs.2,01,01,000 in the computation of book profits under Section 115JB of the Act.

2. The Appellant prays that the AO be directed to allow the provision for project losses in the computation of book profits under Section 115JB of the Act.

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