TMI Blog2013 (12) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... account made under Section 36(1)(vii) was only Rs.1,81,00,000/- the bad debts can be debited only to that extent - Even if the assessee debits the entire bad debts of Rs.7.51 crores to the provision account then the said account will show a debit balance of Rs.5.7 crores which has to be closed by transferring it to the profit and loss account - Both the method will show the same results - Decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tten off u/s 36(1)(vii) and disallowance under Section 14A for an amount of Rs.11,44,900/-. The total income was determined as Rs.44,83,39,648/-. The assessee preferred an appeal before the Commissioner of Income Tax (Appeals) raising three issues. The disallowance of Rs.11,44,900/- u/s 14A, the deduction for bad debts written off amounting to Rs.5,70,13,359/- and deduction for Rs.2,09,80,000/- be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Section 36(2)(v) of the Act. In fact, the assessee wrote off the bad debts amounting to Rs.7,51,13,359/- and the balance outstanding was only Rs.1,81,00,000/-. Then an amount of Rs.5,70,13,359/- was debited to the profit and loss account. According to the Assessing Officer he should have debited the entire amount to the provision for bad debts account. The Tribunal having considered Section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back. The Tribunal found that there was no discussion about the same in the assessment order. It is found that since no such discussion is made, the matter requires examination by the Assessing Officer. With reference to the cross objection in regard to the disallowance made under Section 14A of the Act, the Tribunal found that the assessee's own case relating to the assessment years 2004-2005 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances of the case, and in the light of Section 36(1)(vii) read with 36(viii) whether the deduction under Section 36(1)(vii) should be limited to the amount by which such debt or part thereof exceeds the credit. The first appellate authority as well as the Tribunal had formed an opinion that the method adopted does not make any change at all. Such being the situation, we do not think that any ques ..... X X X X Extracts X X X X X X X X Extracts X X X X
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