JUDGMENT : Vinod Chandran, J. Assessments for two years, i.e. 1988-89 and 1998- 1999, are before us only on the question of computation of book profits. The question raised is as to whether on computing the book profits, the provision for bad and doubtful debts has to be added on to determine the Minimum Alternate Tax (MAT) payable under Sections 115J and 115JA of the Income Tax Act, 1961 applicable in the respective assessment years? 2. Insofar as the assessment year 1988-89 is concerned, what is applicable is Section 115J. The issue is covered by the decision of the Honourable Supreme Court in (2008) 305 ITR 409 (SC), [Commissioner of Income Tax v. HCL Comnet Systems and Services Ltd.]. The addition made was on the ground that the provision for bad and doubtful debts is a provision for liability, which has to be added back as is provided in sub-Clause (c) of 1st Explanation to Section 115J. The Honourable Supreme Court found that the provision for bad and doubtful debts is not a provision for liability, since it is only to cover up the probable diminution in value of assets. Section 115J remains as such and hence, we do not find any valid ground to interfere with the orders of the Tribunal, which is in consonance with the decision of the Honourable Supreme Court, though not specifically noticed. We, hence, decide the question for the assessment year 1988-89 in favour of the assessee and against the Revenue. 3. For the assessment year 1998-99, the issue stands on a different footing for reason of the introduction of clause (g) in the Explanation to Section 115JA. Clause (g) reads as under :- “The amount or amounts set aside as provision for diminution in the value of any asset”. The said amendment also has retrospective effect from 1.4.1998 and hence is applicable from the assessment year 1998-99. 4. The learned counsel for the assessee/respondent takes us through the order of the Income Tax Appellate Tribunal to indicate that there was a remand made on the specific question. The Tribunal upheld the contention of the assessee that being a public sector undertaking, it cannot directly write off the bad and doubtful debts. First, there should be a provision made of bad and doubtful debts. The Tribunal upheld the contention of the assessee that being a public sector undertaking, it cannot directly write off the bad and doubtful debts. First, there should be a provision made of bad and doubtful debts. The method of provision does not efface completely the possibility of recovery and it may not necessarily lead to diminution of assets. We have to notice that if the debt is eventually received, then there would be no diminution of assets and as a corollary provision was also not necessary. MAT is a devise available for certain companies whose total income, as computed under the Act, is less than 30% of its book profits; in which event the income chargeable would be 30% of book profits. To check evasion, the Explanation speaks of computation of book profits, as increased by certain amounts, which include provision for liabilities and now under Section 115JA provision for diminution of assets. 5. We have to notice that the reasoning of the Tribunal was on the basis that the Honourable Supreme Court held that the provision for bad and doubtful debts is not a provision for liability. There was no provision available in the statute to add on the provision for bad and doubtful debts, which results in diminution of assets, to the book profits as computed under Sections 115J and 115JA. The lacuna noticed by the Honourable Supreme Court was supplied by the Union Parliament by way of amendment which has retrospective effect. This is a permissible legislative exercise and hence there can be no claim raised based on the Honourable Supreme Court’s decision for the year 1998-99. The legal infirmity noticed has been now removed and it is possible for adding back the provision for bad and doubtful debts, which as per the Honourable Supreme Court’s decision results only in diminution of assets. 6. We have also noticed the Notes on Clauses which, with respect to clause 43 of the Bill seeking to amend Section 115JA, said so: “It is proposed to amend the said Section so as to provide that any provision for diminution in the value of any asset will also be included in the computation of book profit under the said Section. This amendment will take effect retrospectively from 1st April, 1998 and will, accordingly, apply in relation to the assessment year 1998-99 and subsequent years.” 7. This amendment will take effect retrospectively from 1st April, 1998 and will, accordingly, apply in relation to the assessment year 1998-99 and subsequent years.” 7. We, hence, answer the question for the assessment year 1998-99 with respect to Section 115JA in favour of the Revenue and against the assessee. If the remand order has been complied with, then necessarily, the same shall be revised in accordance with the findings in this Income Tax Appeal. Hence, ITA No.856 of 2009 is rejected and ITA No.934 of 2009 is allowed. No costs.