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2018 (7) TMI 2316 - ITAT CHENNAIDisallowance of deduction claimed u/s.36(1) (viia) - provision as required under the said Section was not created - HELD THAT:- Section 36 (1) (viia) indicate that allowance is for any provision for bad and doubtful debts. In our opinion, the use of the word ‘’any’’ before the words ‘’ provision for bad and doubtful debts’’ indicate that nomenclature under which the provision is made may not be a critical factor in determining the allowance. Once a provision under whatever name is debited in the profit and loss account, then it is can be allowed, provided it is within the limits specified. No doubt assessee had preferred claims in its return which were in excess of what was allowable u/s.36(1) (viia) of the Act, since debits to the profit and loss account whether it was called provision for standard asset, reserve for DCB difference, NPA provision, waiver loans, sundry debtors over three years, bullet jewel loan, overdue interest reserves, sundry debtors over three years, even if they were all aggregated was lower than the amount assessee could have claimed u/s.36(1) (viia) None of the lower authorities had carefully gone through the nature of the each of the debits mentioned above before coming to a conclusion that these were actually not provision for bad and doubtful debts, but something else, like creation of a Reserve. Though peculiarities of nomenclature by itself will not render the assessee ineligible for claiming deduction available to it u/s.36(1) (viia) it is required for the assessee to show that these were indeed provisions for bad and doubtful debts. We are of the opinion that this issue requires a fresh look by the ld. Assessing Officer - Decided in favour of assessee for statistical purpose..
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