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2020 (11) TMI 300 - AT - Income TaxDeduction u/s.36(1)(viia) - assessee had not made any provision for bad and doubtful debts during the previous year as per the provisions contained in section 36(2)(v) and clarification in Explanation 2 to section 36(1)(vii) by the Finance Act, 2013, w.e.f 1.4.2013 - Assessee is a rural regional bank engaged in the business of banking - HELD THAT:- As decided in own case [2020 (1) TMI 995 - ITAT BANGALORE] AO was justified in disallowing the claim for deduction on account of provisions for bad and doubtful debts u/s.36(1)(viia) of the Act as admittedly the Assessee did not debit its profit and loss account any sum towards provision for bad and doubtful debts. We therefore restore the order of the AO and allow Gr.No.1 raised by the revenue. Disallowance of excess deduction claimed u/s. 36(1)(viii) - Quantum of deduction to be allowed u/s.36(1)(viii) - AO has calculated the eligible advances as per Annual Report - AO has adopted the figure of profit after tax and reduced Other Incomes while computing the deductions - CIT-A deleted addition - HELD THAT:- There is no dispute that the Assessee was an eligible entity and that to the extent of 20% of the profits derived from the eligible business, the Assessee was entitled to claim deduction u/s.36(1)(viii). A perusal of the CIT(A) order shows that the relief allowed by the CIT(A) to the assessee is based on the decision of Karnataka State Finance Corporation [1985 (10) TMI 5 - KARNATAKA HIGH COURT] - CIT(A) has not given a factual finding as to how the deduction claimed by the Assessee is in accordance with the statutory provisions - since no finding has been given by the CIT(A) as to the basis on which the relief was given by the CIT(A), we deem it fit and proper to set aside the order of the CIT(A) and remand to the AO for fresh consideration the question of proper deduction to be allowed u/s 36(1)((viii) - Appeal by the revenue is allowed for statistical purposes.
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