Sec. 115JB of Income Tax Act, 1961—MAT- Provision of doubtful debts is not an allowable deduction while computing income under normal provisions, as a corollary to the aforesaid findings the Book Profits under section 115JB are not required to be reduced by that extent.

Facts: Assessee has assailed non-granting of deduction in respect of provision for bad and doubtful debts while computing book profits under section 115JB. The claim was not made by assessee in return of income. The assessee made claim of provision for bad and doubtful debts for the first time before the AO. AO rejected the same. However, the DRP entertained claim of the assessee but rejected assessee’s contentions on merits.

Held, that bad debts have been written off in similar manner in the immediately preceding financial year as well. Thus, it is quite evident that assessee is claiming deduction of actual bad debts written-off and at the same time the assessee is making provision for doubtful debts. Since, deduction is being claimed as well as allowed for actual bad debts written-off, no separate deduction for provision for doubtful debts would be available to the assessee. If the claim of assessee is accepted, it would amount to double deduction which is impermissible.The assessee has itself made clear distinction between bad debts actually written off and the provision for doubtful debts. The accounting treatment being followed by the assessee establishes that the provision for doubtful debts were mere unascertained liability.Since, we have held that provision of doubtful debts is not an allowable deduction while computing income under normal provisions, as a corollary to the aforesaid findings the Book Profits under section 115JB are not required to be reduced by that extent. We do not find any infirmity in the impugned order in rejecting assessee’s claim. - SCHINDLER INDIA (P.) LTD. V/s ASSTT. CIT - [2020] 182 ITD 084 (ITAT-MUMBAI)