COMMISSIONER OF INCOME TAX Vs. DAPUR PHARMA

JUDGEMENT

(1.) Y the court to the asst. yr. 2004 -05.

(2.) THE only issue sought to be raised in the present appeal relates to the treatment given to the provision made for doubtful debts. According to the AO this would be a provision for liability and, therefore, Expln. (c) to s. 115JB(2) of the IT Act, 1961 was applicable. Consequently, the AO made the addition in respect of provision made by the assessee for doubtful debts. However, the CIT(A) and the Tribunal both regarded the said provision as not a provision for liability but a provision for diminution in the value of the assets. Consequently, they held that Expln. (c) to s. 115JB(2) of the said Act did not come into play.

(3.) WE find that the same view has been taken by this Court in CIT vs. Eicher Ltd. (2006) 205 CTR (Del) 469 : (2006) 287 ITR 170 (Del). And, the view taken in CIT vs. HCL Comnet Systems and Services (2008) 219 CTR (Del) 226 : (2007) 292 ITR 299 (Del) has been confirmed by the Supreme Court in CIT vs. HCL Comnet Systems and Services Ltd. (2008) 219 CTR (SC) 222 : (2008) 305 ITR 409 (SC) : (2008) 174 Taxman 118 (SC).