TMI Blog2008 (10) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... he claim of the assesese on the ground that the condition of maintenance of reserve was incorporated only w.e.f. 1 April 1998. The Tribunal dismissed the appeal of revenue. Held that- the assessee was entitled to deduction under section 36(1)(viii)of the Act for the assessment year 1996-97. - 95 of 2008 - - - Dated:- 7-10-2008 - DATTU H. L., BASHEER A. K. JJ. P.K.R. Menon, George K. Georg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing authority. In his order, the assessing authority has noticed that the assessee has created a reserve of Rs. 450,05,629 during the previous year, relevant to the assessment year, and this reserve was transferred to the provision for bad and doubtful debts account before the close of the accounting year and, thus, the assessee has not satisfied the statutory requirement of creating a reserve. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of the assessee. 6. Aggrieved by the said order passed by the first appellate authority, the Revenue was before the Tribunal in I. T. A. No. 227 of 1999. The Tribunal, following the decision of this court in I. T. A. No. 191 of 2000, for the assessment year 1994-95, has rejected the Revenue's appeal. 7. For the previous assessment year, the Tribunal had passed an order, in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut a 'bad and doubtful debts' and therefore, the amounts continued to be as a 'reserve' and not a 'provision'. As we have seen the condition for availing of the benefit under section 36(1)(viii) of the Income-tax Act, as it stood at the relevant time, is that a reserve fund should be created and that there is no dispute that such a fund was created. In the absence of any condition that it should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Tribunal holding that the assessee is not entitled for the benefit of section 36(1)(viii) is erroneous in law. We set aside the order of the Tribunal as well as that of the Commissioner of Income-tax and confirm the decision of the Income-tax Officer. The question raised before us is answered in the affirmative, i.e., in favour of the assessee and against the Revenue." 9. In view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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