PCIT Adds Rs.1.67 Crore Doubtful Debts to Book Profit u/s 115JB: ITAT Reverses Recognizing Actual Write-Off

In a landmark decision, the ITAT reversed the Principal Commissioner of Income Tax (PCIT)’s decision to add ₹1.67 crore worth of doubtful debts to the book profit under Section 115JB of the Income Tax Act. The ITAT found that the debts had been written off as irrecoverable, which warranted their exclusion from book profits. The tribunal emphasized that for the purposes of calculating book profits under Section 115JB, only actual write-offs, rather than doubtful debts, can be added back. This decision provides clarity on the treatment of doubtful debts in book profit calculations under the Minimum Alternate Tax (MAT) framework.