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2023 (8) TMI 595 - KERALA HIGH COURTDeduction u/s 36(1)(vii) - excess provision made in the accounts towards NPA that was not allowable as a deduction as per Explanation -1 to Section 36 (1)(vii) - While the assessee had initially not claimed the said amount while computing the loss that was returned, it had subsequently claimed the said amount towards bad debts written off in terms of Section 36(1)(vii) - ITAT found the assessee entitled to the deduction under Section 36(1)(vii) relying on the judgment of the Supreme Court in Vijaya Bank [2010 (4) TMI 46 - SUPREME COURT] - HELD THAT:- Since we found force in the submission of learned Standing counsel for the Income Tax Department that the Appellate Tribunal had not examined the factual aspect as to whether or not the respondent assessee in the instant case had actually reduced the amount representing bad debts from the value of its assets in the balance sheet and had merely adopted the ratio of Supreme Court judgment in Vijaya Bank [2010 (4) TMI 46 - SUPREME COURT], we requested assessee to make available a copy of the audited balance sheet and profit and loss account of the company for the assessment year in question so as to verify the factual aspects therein. Tribunal was clearly in error in allowing the appeal preferred by the assessee through a mere application of a ratio in Vijaya Bank (Supra). In our view, the Tribunal ought to have ascertained whether the factual situation that was established in Vijaya Bank (Supra) existed in the instant case. We, therefore, find that the substantial questions of law raised by the revenue in this appeal has to be answered in favour of the revenue and against the assessee. AO directed to re-do the assessment.
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