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2014 (9) TMI 1217 - AT - Income TaxAllowability of claim of bad and doubtful debts made in the return of income u/s 36(1)(vii) - HELD THAT:- From 1.4.1989, only the debts which is written as bad and doubtful is to be allowed as deduction u/s 36(1)(vii) of the act. It is the duty of the assessee to written off the debts and claim that it is deduction while computing the income. The provisions of sec. 36(1)(vii) has been amended by insertion of Explanation with retrospective effect from 1.4.1989 by Finance Act 2001 and as per this Explanation, bad debts written off in the accounts of the assessee shall not include in the provisions of bad and doubtful debts made in the accounts of the assessee. Claim of the assessee that the bad debt was debited into the P&L Account and the same amount was reduced from the total loans and advances in Schedule VII in the balance sheet and it shall be allowed as deduction u/s 36(1)(vii) of the Act. In our opinion, the case of the assessee is squarely covered by the decision in the case of Vijaya Bank [2010 (4) TMI 46 - SUPREME COURT] and Kirloskar Systems Ltd [2013 (12) TMI 9 - KARNATAKA HIGH COURT] had considered similar issue. Being so, the case of the assessee is to be allowed. - Decided in favour of the assessee.
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