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TMI Blog2012 (6) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... elief of Excess provision written back - Rs. 2,09,80,000/- 3. In the Cross objection, the assessee is assailing the decision of Ld CIT(A) in partially confirming the disallowance made u/s 14A of the Act. 4. The facts relating to the above said issues are set out in brief. The assessee company is a Kerala Government undertaking engaged in the business of providing financial assistance to industrial projects in the state of Kerala by way of term loan, investment in shares etc. The assessee filed its return of income for the year under consideration disclosing a total income of Rs. 39,01,81,389/-. The AO disallowed the claim of bad debts of Rs. 5,70,13,359/- and al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - to that account, the AO disallowed the claim of Rs. 5,70,13,359/-. The Ld CIT(A) deleted the said disallowance by accepting the contention of the assessee that the debit/adjustment could be made only to the extent of balance available in the "Provision for Bad debts a/c". 7. We have heard the parties on this issue. The issue revolves around sec. 36(2)(v), which reads as under:- "(v) where such debt or part of debt relates to advances made by the assessee to which clause (viia) of sub section (1) applies, no such deduction shall be allowed unless the assessee has debited the amount of such debt or part of debt in that previous year to the provision for bad and doubtful debts account made under that clause." The claim for Provision for b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss account with the remaining balance. It can be seen that the net effect of both the methodologies gives same end result. 9. In view of the foregoing discussion, we are of the view that the ld CIT(A) has rightly allowed the claim of bad debts and accordingly we uphold his decision on this issue. 10. The next issue relates to the reduction of excess provision written back. As stated earlier, we do not find any discussion about the same in the assessment order. During the course of argument, the ld A.R submitted that the assessee had not claimed any deduction earlier in respect of the provision so written back and hence the same cannot be taxed u/s 41(1) of the Act. Since the AO did not discuss this issue, we feel that this matter require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of CIT v. Dhanalakshmi Bank Ltd in ITA No.1324/2009 dated 21.10.2010. However, both the parties have failed to produce a copy of the jurisdictional High Court and hence we are unable to express our opinion. Hence, we are of the view that this issue also requires fresh examination at the end of the AO in the light of the decision of the jurisdictional High Court. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of AO with the direction to examine the issue in accordance with law by duly considering the discussions made supra.
13. In the result, the appeal of the revenue is treated as partly allowed and the cross objections filed by the assessee is treated as allowed. X X X X Extracts X X X X X X X X Extracts X X X X
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