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| The Tax Publishers2020 TaxPub(DT) 4714 (Karn-HC) : (2020) 429 ITR 0534 : (2021) 279 TAXMAN 0437 INCOME TAX ACT 1961
Section 115JB
No provision can be made for ascertained liability and therefore, no provision has been made by the assessee for interest payable and therefore, waiver of interest by IREDA cannot be considered as withdrawal of provision and cannot be reduced from the book profit.
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MAT - Book profit under section 115JB - Computation - Waiver of interest by IREDA
Assessee entered into One Time Settlement (OTS) with IREDA under which entire interest as well as a part of principle amount was waived by the IREDA. It while preparing the return of income, excluded the amount as no part of such interest had even been allowed in any prior assessment year and provisions of section 41(1) were not attracted. AO by an Order inter alia included an amount in the book profits for levying tax under section 115JB and negatived the plea of the assessee that the sum was deductible in full under Explanation to section 115JB (2). Held: No provision can be made for ascertained liability and therefore, no provision has been made by the assessee for interest payable and therefore, waiver of interest by IREDA cannot be considered as withdrawal of provision and cannot be reduced from the book profit. As held that the contention of the assessee that a sum should be considered as waiver of interest and part of book profit as interest payable for pre commencement period, needs examination and therefore, the matter was remitted for adjudication in accordance with law.
REFERRED :
FAVOUR : Matter remanded
A.Y. : 2007-08
IN THE KARNATAKA HIGH COURT
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