Mere Provision not eligible for Adjustment against Book Profit it must be Ascertained Liability

M/s. Southern Power Distribution Company of Andhra Pradesh Ltd. Vs DCIT (ITAT Hyderabad) Per Smt. P. Madhavi Devi, J.M. We find that the assessee has made a provision of Rs.22.81 crores for bad and doubtful debts during the relevant previous year. The AO added it back to the book profit holding that it is not an ascertained liability. The CIT (A) has confirmed the addition by observing that subsequent to the amendment to Explanation 1(i) to section 115JB, any provision leading to diminution in the value of any asset, has to be added to the book profit. The fact is that the assessee has debited...