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2019 (11) TMI 1800 - ITAT COCHINRevision u/s 263 - as per Pr. CIT, the assessee had written off bad and doubtful debts towards NPA and therefore, the assessee is entitled only to the extent bad and doubtful debts actually written off u/s. 36(1)(vii) - HELD THAT:- This contention of the CIT(A) is having no merit since this issue was considered in the case of Vijaya Bank [2010 (4) TMI 46 - SUPREME COURT] After April 1, 1989, a mere provision for bad debt will not be entitled to deduction under section 36(1)(vii). If an assessee debits an amount of doubtful debt to the profit and loss account and credits the assets account like sundry debtors account, that would constitute a write off of an actual debt. However, if an assessee debits provision for doubtful debts to the profit and loss account and makes a corresponding credit to the “current liabilities and provisions” on the liabilities side of the balance-sheet, then it would constitute a provision for doubtful debt. In the latter case, the assessee would not be entitled to deduction after April 1, 1989. Hence, we find no error in the order of the AO so as to render it prejudicial to the interests of the revenue. Pr. CIT is not justified in invoking the provisions of section 263 on this issue. Hence, we quash the order of the Pr. CIT passed u/s. 263 - Appeal of the assessee is allowed.
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