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TMI Blog2018 (12) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant's case in spite of the fact that the appellant has debited the said sum of Rs. 2,18,56,250/- in the P&L account and netted the same from the total advances outstanding in the balance sheet? ITA.264/2009 Whether on the facts and in the circumstances of the case, the Tribunal is correct in law and fact in holding that the write off is not complete in the appellant's case in spite of the fact that the appellant has debited the said sum of Rs. 3,04,22,000/- in the P&L account and netted the same from the total advances outstanding in the balance sheet? 2. We have heard Sri.Mohanan Pulickal for the appellant and Sri.Jose Joseph, Standing Counsel for the Department. 3. In fact, we do not think such a question arises at a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal, the disallowance was affirmed. Before the Tribunal, the appeal was connected with the appeal for the assessment year 1994-95 and heard together. There again a contention was raised that the AO had declined the deduction on account of the ledger accounts of the account holders having not been credited with the written off amounts; thus closing the said accounts. It was also contended that with effect from 01.04.2000 a proviso and Explanation was introduced in Section 36(1)(viia)(a) allowing a deduction to Scheduled Banks for any provision made by it for assets classified by the RBI as doubtful debts. The Tribunal held that the proviso was introduced only from 01.04.2000 and, hence, not applicable in the subject assessment year. 5. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction for provision for bad and doubtful debts unless they are bad and doubtful debts with respect to rural bank advances, which was governed by sub-clause (viia) of Section 36(1) as it existed then. We are of the opinion that the assessee is labouring under a misapprehension that the AO declined their claim only on the basis of the fact that the loan accounts were not credited with the amounts shown as written off. In the subject assessment years, the deduction was permissible only for the written off amounts and not provision for debts classified as bad and doubtful debts by the RBI. 6. It is in this context, we also have to refer to the assessment for the year 1994-95 keeping in mind the fact that the AO, for the year 1993-94, had sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... written off amounts exceed the credit balance in the provision for bad and doubtful debts account. We also notice that this provision was exclusively with respect to the rural advances, since the written off debts of advances other than rural advances was claimed by the assessee separately for Rs. 6,32,796/-; which was declined in para 3 of Annexure-C of I.T.A.No.361/2009 (Assessment Year 1993-94). The disallowance was interfered with in first appeal. We saw from the extracted portion of the assessment order for the year 1994-95 that from Rs. 8,97,66,930/-, which is the amount of bad debts of rural advances written off in the said year, the provision made under sub-clause (viia) of Section 36(1) of Rs. 4,63,64,000/- has been deducted. The e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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