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2019 (7) TMI 1973 - AT - Income TaxDeduction u/s 36(1)(viia) for provision of standard assets as per the circular of RBI - whether this provision being as per law may be allowed? - HELD THAT:- As decided in case of Nawanshahr Central Co-op. Bank Ltd. [2018 (1) TMI 1683 - ITAT AMRITSAR] though section 36(1) (vii) states that deduction for provision is allowable in respect of provision for bad and doubtful debts, the computation of such deduction is made with reference to total income of the specified Banks based upon quantum of average advances. The deduction of the provisions is neither limited to the quantum of bad debts in the books nor is computed with reference to the quantum of standard assets. The deduction in this clause refers to allowable provisions of anticipated default on the loans and advances made in respect of total assets including standard assets and the claim of the assessee does not fall into the proviso to section 36(1) (viia) as the proviso deals with further deduction for provisions on bad and doubtful debts. The claim of the assessee is covered in the main provisions of section 36(1)(viia) . In Vellore District Central Co-operative Bank Ltd. [2016 (2) TMI 158 - ITAT CHENNAI] held by the Tribunal that doubtful debts may be under different nomenclature and this will not disentitle the assessee for claiming deduction under the provisions of section 36(1)(viia) - thus delete the disallowance made by the AO. Decided in favour of assessee.
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