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2008] 305 ITR 409 [2008] 174 TAXMAN 118 (SC) SUPREME COURT OF INDIA Commissioner of Income-tax, Delhi v. HCL Comnet Systems & Services Ltd.* S.H. KAPADIA AND B. SUDERSHAN REDDY, JJ. CIVIL APPEAL NO. 5800 OF 2008 SEPTEMBER 23, 2008 Section 115JA of the Income-tax Act, 1961 - Minimum alternate tax - Assessment year 1997-98 - Whether for purposes of computing book profit under section 115JA, provision made by assessee for bad and doubtful debt can be added back to net profit only if clause (c) of Explanation to section 115JA stands attracted - Held, yes - Whether clause (c) of said Explanation is attracted only if amount is set aside as provision; provision is made for meeting a liability; and provision is for an unascertained liability - Held, yes - Whether where debt was amount receivable by assessee, any provision made towards irrecoverability of said debt could be said to be a provision for liability so as to attract clause (c) of Explanation and could be added back to net profit for purpose of computing book profit under section 115JA - Held, no FACTS During the relevant assessment year, the assessee-company had made provision for bad and doubtful debts and debited the amount of said provision to the profit and loss account. The Assessing Officer, for the purpose of computing its book profit under section 115JA, added the aforesaid amount to its book profit as per clause (c) of the Explanation to section 115JA. On appeal, the Commissioner (Appeals) allowed the assessee's appeal. The Tribunal and the High Court affirmed the decision of the Commissioner (Appeals). On the revenue's appeal to the Supreme Court : HELD Section 115JA, which refers to 'deemed income relating to certain companies', has an overriding effect upon other provisions of the Act. It is applicable only to the case of a company. As per this section, the Assessing Officer has to first compute the total income of the assessee as per the provisions of the Act. Thereafter, he has to compute 30 per cent of its book profit and then to compare the total income as computed as per the provisions of the Act with 30 per cent of book profit computed under section 115JA. If 30 per cent of the book…

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