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2019 (6) TMI 1721 - AT - Income TaxDeduction u/s. 36(1)(viia) - assessee has not made any provision for bad and doubtful debts in its original return of income, but filled in its revised return - AO held the bank have not created any provision for bad and doubtful debts before filing the original return - HELD THAT:- Before creating reserve for bad and doubtful debts the same should be got approved by the Directors / Member of the bank. As the assessee has not created any reserve for bad and doubtful debts in the original return of income, it is clear that, the bank has not created any reserve for bad and doubtful debts during the year. The fact is also evident from the statement of Break-up of the Details of income furnished in support of the original return of income which was signed by the Managing director and General Manager of the bank, wherein no such reserve was created. It s clear from the decision of the Hon’ble High Court of Punjab & Haryana in the case of State Bank of Patiala [2004 (5) TMI 12 - PUNJAB AND HARYANA HIGH COURT] that making of provision equal to the amount claimed as deduction, in the account books is necessary for claiming deduction u/s. 36(1)(viia). Since the assessee has not made any provision in the books of accounts, as admitted by the assessee before the AO by its letters dated 21.12.2016, in the respective assessment years, the assessee is not entitled for the impugned deductions for the respective assessment years. Further, the relevant portion of the order of the co-ordinate Bench of this Tribunal in the case of M/s.The Salem Dt. Central Co.Op Bank Ltd., Salem [2017 (6) TMI 1386 - ITAT CHENNAI] Circular is very clear that the deduction is permissible only to the extent of provisions actually created in the books of accounts for the relevant Assessment Year. This view is supported by the decision of the Hon’ble Punjab & Haryana High Court cited supra. Therefore, we do not find any infirmity in the order of the Ld.CIT(A) and the same is allowed. Appeals filed by the assessee are dismissed.
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