Southern Technologies Ltd. Vs. JCIT

An interesting question of law which arises for determination in these Civil Appeals filed by Non-banking Financial Companies (NBFCs for short) is: Whether the Department is entitled to treat the ‘Provision for NPA, which in terms of RBI Directions 1998 is debited to the P&L Account, as income under Section 2(24) of the Income Tax Act, 1961 , while computing the profits and gains of the business under Sections 28 to 43D of the IT Act? Facts For the sake of convenience, we may refer to the facts in the case of M/s. Southern Technologies Ltd. [Civil Appeal No. 1337 of 2003]. At the ou...