Commr.Of Income Tax-Iv,Delhi vs M/S Hcl Comnet Systems & Services Ld

The Supreme Court ruled that the Assessing Officer (AO) was incorrect in adding back the provision for doubtful debts of Rs. 92,15,187/- to the net profit under clause (c) of the Explanation to Section 115JA of the Income-tax Act, 1961. The Court held that the provision for bad debts is not an ascertained liability and thus should not be included in the computation of 'book profit' as defined under Section 115JA. The decision of the CIT(A), which was affirmed by the Tribunal and the High Court, was upheld, allowing the assessee's appeal.