TMI Blog2011 (8) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... assets - The decision of the Apex Court in VIJAYA BANK v. CIT, (2010 -TMI - 75617 - SUPREME COURT) the Apex wherein it was held that after insertion of explanation to Section 36(1)(vii), the assessee is required not only to debit the profit and loss account but simultaneously also reduce loans and advances or the debts from the assets side of the balance sheet to the extent of the corresponding amount so that, at the end of the year, the amount of loans and advances/debtors is shown as net of the provisions for the impugned bad debt - Thus, the Apex Court held that the assessee was entitled to the benefit of deduction under Section 36(1)(vii) of the Act as there was an actual write off by the assessee in its books - Decided in favour of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by the decision of this Court in T.C.No.197 of 2005 dated 26.7.2011 (M/s.Thiru Arooran Sugars Ltd., Chennai-34 Vs. The Deputy Commissioner of Income-tax, Special Range-VII, Chennai), wherein, rejecting the claim of the Revenue, this Court upheld the order of the Tribunal that the temporary structure by means of false ceiling and office renovation had not resulted in a capital expenditure. Applying the decision reported in [1998] 233 ITR 468 (Commissioner of Income Tax Vs. Madras Auto Service P. Ltd.) and [2007] 292 ITR 266 (Mad) (Commissioner of Income Tax Vs. Ayesha Hospitals P. Ltd.), this Court held that the assessee was entitled to 100% depreciation on the false ceiling and wooden partition inclusive of furniture, electrical wiring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction, the assessee classified the advances that had become irrecoverable as non-performing assets and a provision was made for the same in the books of accounts. The assessee claimed that the provision made was in line with the guidelines of the Reserve Bank of India, prescribed for non-banking finance company and hence, the said transaction was allowable as deduction. As regards the investments made, the actual market value had dwindled down due to market fluctuation. The difference between the cost of acquisition and the lower realisable value of these investments were ascertained and a provision was made in the profit and loss account for writing off the same in the coming years. The Assessing Officer held that the assessee was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non performing assets in terms of the Reserve Bank of India's directions did not constitute expense on the basis for granting deduction under Section 36(1)(vii) of the Income Tax Act. In the light of the said decision, learned Standing Counsel submitted that the remand order has to be set aside. 6. Per contra, learned counsel appearing for the assessee referred to the subsequent decision of the Apex Court reported in 323 ITR 166 VIJAYA BANK v. CIT, wherein the issue was again considered to hold that the provision under Section 36(1)(vii) covered the case of banking as well as non banking assessees. In the light of the said decision, learned counsel for the assessee submits that the Assessing Officer may be directed to consider the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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