MAT- Prov for Bad Debts to be allowed for certain lia.

Last updated: 14 December 2008

Court :
SUPREME COURT OF INDIA

Brief :
Section 115JA of the Income-tax Act, 1961 - Minimum alternate tax - Assessment year 1997-98 - Whether for purposes of computing book profit under section 115JA, provision made by assessee for bad and doubtful debt can be added back to net profit only if clause (c) of Explanation to section 115JA stands attracted - Held, yes - Whether clause (c) of said Explanation is attracted only if amount is set aside as provision; provision is made for meeting a liability; and provision is for an unascertained liability - Held, yes - Whether where debt was amount receivable by assessee, any provision made towards irrecoverability of said debt could be said to be a provision for liability so as to attract clause (c) of Explanation and could be added back to net profit for purpose of computing book profit under section 115JA - Held, no

Citation :