Case Law Details
ITO Vs. Scheme A1 of ARCIL CPS (ITAT Mumbai)
Reversal of the impairment provision created by the assessee in the earlier years in respect of the financial asset was merely a book entry without any corresponding amount payable by anybody or any possibility of receiving any benefit or money or money’s worth. We are of a strong conviction that a write-back of a provision can be made taxable only if the same was claimed as a deduction in the earlier year when it was created. We have perused the observations of the CIT(A), and are in agreement with the view therein taken by him. Accordingly, concurring with the view taken by the CIT(A) that the write-back of the impairment provision of Rs.59,76,25,576/- could not have been treated as the income of the assessee, we uphold the same.
FULL TEXT OF THE ITAT JUDGEMENT
The present appeal filed by the revenue is directed against the order passed by the CIT(A)-33, Mumbai, dated 03.01.2018, which in turn arises from the assessment order passed by the A.O under Sec. 143(3) of the Income Tax Act 1961 (for short „Act‟), dated 15.03.2016 for A.Y. 2013-14. The revenue has assailed the impugned order on the following grounds of appeal before us:
1. “Whether on the facts and circumstances of the case and in law, the Ld CIT(A) is justified in not appreciating the action of the AO in treating the assessee as AOP on the basis of the nature of activity carried out by the assessee and “the high yield/profit earned by it from NPA purchased at a very low/nominal cost and several other reasons discussed in the Assessment order?”
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