Section 11 - Amendment of section 36 - Direct Tax Laws (Amendment) Act, 1987

11. Amendment of section 36. In section 36 of the Income-tax Act,- (a) in sub-section (1), - (i) in clause (ii), the provisos shall be omitted; (ii) in clause (vii), in the opening portion, for the words any debt or part thereof which is established to have become a bad debt in the previous year , the words any bad debt or part thereof which is written off as irrecoverable in the accounts of the assessee for the previous year shall be substituted; (iii) in clause (viia), in the Explanation, for clause (ii), the following clause shall be substituted, namely :- (ii) scheduled bank means the State Bank of India constituted under the State Bank of India Act, 1955 (23 o 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or any other bank being a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934), but does not include a co-operative bank; ; (b) in sub-section (2),- (i) for clause (i), the following clause shall be substituted, namely :- (i) no such deduction shall be allowed unless such debt or part thereof has been taken into account in computing the income of the assessee of the previous year in which the amount of such debt or part thereof is written off or of an earlier previous year, or represents money lent in the ordinary course of the business of banking or money-lending which is carried on by the assessee; ; (ii) in clause (iii), after the words earlier previous year , the brackets, words, figures and letters (being a previous year relevant to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year) shall be inserted; (iii) in clause (iv), after the words accounts of the previous year , the brackets, words, figures and letters (being a previous year relevant to the assessment year commencing on the 1st day of April, 1958, or any earlier assessment year) shall be inserted.