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2021 (6) TMI 597 - AT - Income TaxDeduction u/s 36(1)(vii) - Assessee filed the revised return of income by claiming provision for bad and doubtful debts - HELD THAT:- There is no doubt that the assessee is engaged in the business of banking and has made provision for bad and doubtful debts for loans and advances. The AO doubted whether it was a reserve or provision. But, the assessee in the second revised computation of income in the profit & loss account, it changed as ‘provision’ in place of ‘reserve’ As decided in M/S. VIJAYA BANK, [2020 (11) TMI 486 - KARNATAKA HIGH COURT ]deduction u/s 36(1)(vii) can be allowed when the provision is made for bad debts in P&L Account. It is clear from the order of the CIT(A) that in the revised Profit & Loss Account, the disputed issue was debited in the Profit & Loss Account. Therefore, following the ratio laid down by the Hon’ble Court, we set aside the order of the CIT(A) and direct the AO to allow the assessee’s claim of the provision for bad and doubtful debts - Appeal of the assessee is allowed.
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