TMI Blog2020 (11) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... time of actual write off, there is not statutory bar in making the claim under two provisions. On facts, it is the case of the assessee that the bad debts actually written off are out of loans advances made prior to AY 2007-08 for which no provisioning under s. 36(1)(viia) of the Act could be made. The aspects on double deduction on same loan/advances requires factual verification. In case the AO finds that the bad debt written off is out of loans/advances made prior to the operation of Section 36(1)(viia) of the Act, the AO shall allow the bad debt so written off, subject to the fulfillment of other conditions of Section 36(2) of the Act. However, where it is found that the bad debts relate to loans and advances of the years where benefit to deduction under s. 36(1)(viia) of the Act to have been extended to the assessee, the AO shall appropriate and reduce the provisioning already made from write off. Assessee shall not be entitled to claim of deduction of bad debt for the same loan/advances twice, one under s. 36(1)(vii) and other under s. 36(1)(viia) - the issue is remitted back to the file of the AO for factual verification and examinations as may be considered exped ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on record. 1.3 The appellant respectfully submits that as per section 36(2) of the Act, bad debts of ₹ 48,34,350 should be allowed. 2.1 That the ld. CIT (A) has erred in not granting relief in respect of claim of ₹ 13,25,272. 2.2 The appellant respectfully submits that the total disallowance of depreciation of ₹ 2,20,00,663 includes ₹ 13,85,272. Therefore no separate addition can be made for ₹ 13,85,272. This was requested the Assessing Officer for which no finding has been given. 4. When the matter was called for hearing by the Tribunal, the learned Senior Counsel for the Assessee at the outset submitted that Ground No. 1 concerns controversy for allowability of bad debts amounting to ₹ 48,34,350/- actually written off under s. 36(1)(vii) of the Act in the books of account simultaneously and parallely with the deduction towards provision for bad debt under s. 36(1)(viia) of the Act at specified percentage amounting to ₹ 28,42,274/-. To begin with, it was submitted that the Revenue has controverted the bad debt claim of the assessee on the ground that assessee is not entitled in law to claim deduction both under s. 36( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AY 2007-08 would require factual verification which has not been carried out by the revenue authorities so far at any stage and thus the issue justifiably requires to go back to the file of the AO for suitable verification on this count. It was contended that where the debts written off are found to be independent of debts for which provisions have been made, the deduction under s. 36(1)(vii) of the Act is allowable independently and irrespective of provision for bad debts created by the Scheduled Bank in relation to advances made by its rural branches, subject to limitation that an amount should not be deducted twice under s. 36(1)(vii) Section 36(1)(viia) of the Act simultaneously. 5. Adverting to the 2nd issue on account of renovation expenditure of capital nature amounting to ₹ 13,85,272/-, the learned Senior Counsel adverted to a representation dated 04.02.2013 made by assessee before the AO and referred to para 12 therein to submit that the assessee has disallowed ₹ 2,20,00,663/- on account of depreciation and has also disallowed ₹ 13,85,272/- separately again, purely out of mistake. It was submitted that the disallowance of ₹ 2,20,00,663/- alread ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (viia) of the Act on the same set of debts. 7. On the 2nd issue, the learned DR for the Revenue observed that the revenue authorities have not disturbed the return filed by the assessee himself on the point and hence no fault can be found with Revenue. 8. We have carefully considered the rival submissions. 8.1 The first issue relates to simultaneous claim of twin deductions in relation to bad debts; one towards actual write off of bad debt under s. 36(1)(vii) of the Act and another on account of provisions of bad debt under s. 36(1)(viia) of the Act. As pointed out on behalf of the assessee, the claim made under s. 36(1)(vii) of the Act by the assessee is to be reckoned as independent of provisioning available under s. 36(1)(viia) of the Act. As pointed out, the benefit of provisioning under s. 36(1)(viia) of the Act was not permissible at all to Co. op. Banks prior to AY 2007-08. As stated, the bad debt written off under s. 36(1)(vii) of the Act does not emanate out of loans and advances for which the provisioning has been availed under s. 36(1)(viia) of the Act in any manner. In the light of the decision of the Hon'ble Supreme Court in case of Catholic Syrian Bank Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relief to the assessee where it is found that the assessee has wrongly reported excessive taxable income in its return of income indeed owing to inadvertent mistake of excessive disallowance on the point. Needless to say, the assessee shall fully cooperate in the proceedings before the AO for determination of the point afresh in accordance with law. 10. Ground No. 2 of the assessee's appeal is allowed for statistical purposes. 11. In the result, appeal of the assessee is allowed for statistical purposes. ITA Nos. 3469/Ahd/16 (AY 2012-13) ITA No. 960/Ahd/18 (AY 2014-15) 12. As stated on behalf of the assessee, identical issue towards bad debt has arisen in other appeals of the assessee in ITA No. 3469/Ahd/2016 AY 2012-13 as well as ITA No. 960/Ahd/2018 2014-15. For the parity of the reasons, the issue of dual claim of bad debt both under s. 36(1)(vii) 36(1)(viia) of the Act is remitted back to the file of the AO for its fresh determination in accordance with law in the light of discussions made in ITA No. 3468/Ahd/2016 concerning AY 2010-11. 13. In the result, all three appeals of the assessee are allowed for statistical purposes. This Order pronounced on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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