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2017 (2) TMI 401 - AT - Income TaxDisallowance of claim of bad debt - Held that:- The assessee is an urban co-operative bank eligible for deduction for bad debts on account of provision for bad and doubtful debts under section 36(1)(viia). It was informed that since the assessee was not having any rural advances, it was not eligible for the benefit of deduction under section 36(1)(viia). Under these circumstances, the assessee made claim on account of bad debts under section 36(1)(vii) as normal assessee, i.e. an assessee other than a bank. But, the Assessing Officer denied the benefit of deduction, firstly for the reason that the assessee cannot claim double deduction. However, this objection was rightly removed by the learned Commissioner of Income-tax (Appeals) by observing that in case the assessee has not made claim under section 36(1)(viia), then the assessee was entitled to claim deduction under section 36(1)(vii). The bad debt has been written off in the account in the year before us as is evident from the fact that when the amount was credited in the respective debtors' account, the debtors were reduced to that extent. Further, the profit and loss account has already been debited with the corresponding amount as per the accounting procedure followed by the assessee as narrated above. Thus, both the conditions stand fulfilled. The second condition was fulfilled in the year before us. Thus, in our view, the assessee became eligible to claim deduction on account of bad debts in the year before us. Under these circumstances, we find that the assessee is principally eligible to claim bad debts in the year before us.
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