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2020 (2) TMI 1020 - HC - Income TaxDeduction claimed towards bad and doubtful debts u/s 36(viia) - HELD THAT:- A conjoint reading of provision contained in Section 36(1)(viia) and explanatory note dated 30.06.1982 it is evident that deduction provided in Section 36(1)(viia) shall be allowed in respect of the matters dealt therein in computing the income. The condition precedent for claiming deduction under Section 36(1)(viia) of the Act is that a provision for bad and doubtful debt should be made in the accounts of the assessee. The aforesaid Section mentions the maximum amount for which such a provision should be made. If a provision is made in excess of the limits prescribed under the Section, the assessee would not be entitled to deduction of the excess amount. Once a provision is made and the amount of deduction is within the limit prescribed under the Act, the assessee would be entitled to deduction of the amount for which provision is made in the books of accounts. Language employed in Section 36(1)(viia) of the Act is clear and unambiguous. It is well established Rule of interpretation stated by LORD CAIRNS that “if the person sought to be taxed comes within the letter of the law he must be taxed, however great the hardship may appear to the judicial mind to be. On the other hand, if the Crown seeking to recover the tax, cannot bring the subject within the letter of the law, the subject is free, however apparently within the spirit of law the case might otherwise appear to be. It is equally well settled legal proposition that “in a taxing act once has to look merely as what is said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.” [SEE:’COMMISSIONER OF INCOME TAX, MADRAS VS. KASTURI AND SONS LTD.- 1999 (3) TMI 6 - SUPREME COURT and ‘MAHIM PATRAM (P) LTD. VS. UNION OF INDIA - 2007 (2) TMI 73 - SUPREME COURT ] [See: PRINCIPLES OF STATUTORY INTERPRETATION, JUSTICE G.P. SINGH, 14TH EDITION, PAGE 879]. Therefore, the question of going into intention or object behind the provision viz., Section 36(1) (viia) of the Act does not arise. The submission that even in the absence of any provision, the assessee is entitled to deduction cannot be accepted. The assessee is entitled to deduction to the extent provision made in the accounts subject to limit mentioned in Section 36(viia) of the Act. - Decided in favour of revenue
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