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2012 (3) TMI 619 - AT - Income TaxDisallowance for bad and doubtful debts u/s 36(i)(viia) - Assessee was a scheduled bank in relevent assessment year, before amalgamation - AO concluded that the deduction of 10% of the aggregate average advances made by the rural branches of the bank was not available to the assessee because in the opinion of the AO, the assessee was not a scheduled bank during the year under consideration - CIT(A), allowed the the deduction @ 10% of aggregate average advances made by the rural branches in addition to deduction @ 7.5 % of total income as per provision of Section 36(i)(viia)(a) - HELD THAT:- Following the decision in the case of Catholic Syrian Bank Limited [2012 (2) TMI 262 - SUPREME COURT] order of CIT(A) allowed the deduction sustained. Disallowance for bad and doubtful debts u/s 36(i)(viia) - written off of irrecoverable debts - Party wise debts not written off - HELD THAT:- Even the Hon'ble Supreme Court in the case of Vijaya Bank, [2010 (4) TMI 46 - SUPREME COURT], observed that, after insertion of Explanation to sec. 36(1)(vii), assessee is required not only to debit the P&L a/c but simultaneously also reduce loans and advances or the debtors from the assets side of the balance sheet to the extent of the corresponding amount so that at the end of the year the amount of loans and advances/debtors is shown as net of provision for impugned bad debt; assessee-bank having, besides debiting the P&L a/c and creating a provision for bad and doubtful debts, simultaneously obliterated the said provision from its accounts by reducing the corresponding amount from loans and advances/debtors on the assets side of the balance sheet, it was entitled to benefit of deduction under s. 36(1)(vii); it was not necessary to close the individual account of each debtor in the books. In view of the above decision of the Hon'ble Supreme Court, matter restored back. Disallowance of Expenditure u/s 40(a)(ia) - Assessee has claimed expenses on which TDS was deducted but deposited after filing of return but before due date of filing of ITR u//s 139(1) - HELD THAT:- As a clear finding has been recorded by the ld.CIT(A) to the effect that the assessee has not only deducted tax on audit fee but also deposited the same before due date of filing return u/s 139(1). There is no reason to disallow the claim of deduction in view of the amended provisions of Section 40a(ia), which were amended by the Finance Act, 2008, with retrospective effect from 2005. Accordingly, the AO is directed to allow the same as per the amended provisions of law - Decision in favour of Assessee.
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