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2015 (8) TMI 1294 - AT - Income TaxEligibility of claim of deduction u/s 36(1)(viia) - Held that:- . On a reference to the provisions of section 36(1)(viia) of the Act, it is very much clear that for claiming deduction under the said provision, assessee has to create a provision for bad and doubtful debts in its books of account. Therefore, contention of ld. AR that there is no need for making any provision for bad and doubtful debts for claiming deduction u/s 36(1)(viia) is not acceptable We are inclined to remit the matter back to the file of AO for deciding afresh after verifying the fact whether assessee has created any provision for bad and doubtful debts in its books of account in terms with section 36(1)(viia). In case it is found that assessee has made a provision for bad and doubtful debts in its books of account, then, deduction u/s 36(1)(viia) can be allowed to assessee. In case it is found that assessee has not made any provision for bad and doubtful debts in its books of account, then, assessee would not be eligible for any deduction u/s 36(1)(viia) in view of the ratio laid down by the Hon’ble P&H High Court in case of State Bank of Patiala Vs. CIT (2004 (5) TMI 12 - PUNJAB AND HARYANA High Court ). With the aforesaid observations, we remit the issue back to the file of AO for deciding afresh - Decided in favour of revenue for statistical purposes.
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