Once provision is made for diminution in value of any asset, same has to be added to net profit for computing book profit u/s 115JB
Income-tax : If amount set aside as provision for diminution in value of any asset, appears on debit side of profit and loss account, which implies that amount of net profit as per profit and loss account is after amount of such provision, then such amount will be added back to net profit for computing `book profit' as per Explanation 1 to section 115JB(2); there is no other requirement in language of section for addition or non-addition of amount of provision for diminution in value of any asset to amount of net profit as shown in profit and loss account, depending on way in which such provision has been shown in balance sheet [Section 115JB of the Income-tax Act, 1961 - Minimum Alternate Tax]
l There is not even a remotest hint in the language of clause (i) of Explanation 1 to section 115JB that some value of the asset must remain after diminution, as a precondition for adding it to the net profit - [2011] 10 taxmann 144 (Mum. - ITAT)
Income-tax : If amount set aside as provision for diminution in value of any asset, appears on debit side of profit and loss account, which implies that amount of net profit as per profit and loss account is after amount of such provision, then such amount will be added back to net profit for computing `book profit' as per Explanation 1 to section 115JB(2); there is no other requirement in language of section for addition or non-addition of amount of provision for diminution in value of any asset to amount of net profit as shown in profit and loss account, depending on way in which such provision has been shown in balance sheet [Section 115JB of the Income-tax Act, 1961 - Minimum Alternate Tax]
l There is not even a remotest hint in the language of clause (i) of Explanation 1 to section 115JB that some value of the asset must remain after diminution, as a precondition for adding it to the net profit - [2011] 10 taxmann 144 (Mum. - ITAT)
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