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2023 (8) TMI 630 - AT - Income TaxDeduction u/s 36(1)(viia) - amount of provision made towards bad and doubtful debts in the books of accounts - DR submitted that the provision made on standard assets cannot be considered as provision made for bad and doubtful debts since the assessee itself has classified the asset as good and recoverable i.e. standard asset - HELD THAT:- As in the given case the Hon'ble Tribunal has given a direction to the Assessing Officer to consider the issue afresh in the light of the decision of Sarvodaya Sahakari Bank Ltd [2014 (5) TMI 1182 - ITAT AHMEDABAD] whereby the AO is required to look into the total provision towards bad and doubtful debts as per the books of accounts of the assessee irrespective whether the provision is made in the current year or previous year and allow the claim u/s. 36(1)(viia) accordingly. However we notice that the Assessing Officer in the order giving effect has not discussed anything in this regard but has proceeded to restrict the claim based on a different ground. We notice that the revenue had not taken any action against the directions of the Tribunal as per the original order, and therefore the directions have crystallized which means that the Assessing Officer has no alternate course except to follow the directions. Accordingly, AO in the remand proceedings ought to have verified the availability of sufficiency of provisions as per the books of accounts of the assessee and allow the claim u/s. 36(1)(viia). As has been pointed out by assessee is carrying a provision of Rs. 1549 crores as on 31/03/2009 and the claim made during the year under consideration is Rs. 820.28 crores. Therefore respectfully following the decision of Sarvodaya Sahakari Bank Ltd (supra), we are of the view that no disallowance is warranted since the assessee is having sufficient provision towards bad and doubtful debts in the books of accounts and delete the disallowance made by restricting the amount claimed as a deduction u/s. 36(1)(viia) by the Assessing Officer in this regard. Decided in favour of assessee.
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