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 clarified that provisions for doubtful debts do not constitute 'provisions made for meeting liabilities, other than ascertained liabilities' as per the definition of 'book profit'. The decision of the CIT(A) and the Tribunal was upheld, affirming that the AO's action was unjustified.