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2018 (12) TMI 682 - HC - Income TaxClaim made u/s 36(1)(viia) - excess amounts written off in excess of the provision for bad debts under Section 36(1)(viia) - assessee is labouring under a misapprehension that the AO declined their claim only on the basis of the fact that the loan accounts were not credited with the amounts shown as written off - Held that:- There could be no deduction claimed because obviously even if the said amounts are written off in the said year, it would not exceed the provision under Section 36(1)(viia). In such circumstances, we do not think that the question raised requires an answer. The amounts written off were not declined deduction, merely for the reason of the same having not been credited in the party's account; in which context alone, the decision of the Gujarat High Court applies. The learned Standing Counsel for Government of India (Taxes) alertly points out that Gujarat High Court decision as relied on by the assessee is no longer good law in view of the decision in Southern Technologies Ltd. v. Joint CIT [2010 (1) TMI 5 - SUPREME COURT OF INDIA]. The very same Section 36(1)(vii) and (viia) came up for consideration before the Hon'ble Supreme Court. The Hon'ble Supreme Court noticed the Explanation brought in by Finance Act, 2001 with retrospective effect from 01.04.1989. Here, the written off amounts have been granted deduction, only to the extent of the same exceeding the provision under clause (viia) of Section 36(1), which is in accordance with the statutory prescription.
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