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TMI Blog2008 (5) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 143(1)(a) of the Income Tax Act and in the proceedings so issued, the Assessing Officer among other things made an addition of Rs.3,04,22,000/- representing provision towards bad debt. Even though assessee filed rectification application for deletion of the addition and consequential levy of additional tax under Section 143 (1A) of the Act, the same was rejected. The appeal filed before the first appellate authority was dismissed and the Tribunal confirmed the same in second appeal. It is against this order the assessee has filed this appeal raising the following questions: "(i) Whether on the facts and in the circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest payable by, or refundable to, the assessee, the following adjustments shall be made in the income or loss declared in the return, namely:- (i) any arithmetical errors in the return, accounts or documents accompanying it shall be rectified; (ii) any loss carried forward, deduction, allowance or relief, which, on the basis of the information available in such return, accounts or documents is prima facie admissible but which is not claimed in the return, shll be allowed; (iii) any loss carried forward, deduction, allowance or relief claimed in the return, which, on the basis of the information available in such return, accounts or documents, is prima facie inadmissible, shall be disallowed." 3. Counsel for the assessee relied on A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a deduction under Section 36(1)(vii) and not under Section 36(1)(vii)(a) of the Act. Counsel for the assessee contended that eligibility for deduction of provision for bad debt is a debatable issue and is ceased to be so only by virtue of Explanation introduced to Section 36(1)(vii) by Finance Act 2001 with effect from 1.4.1989. The contention of counsel for the appellant is that as on date of completion of proceedings under Section 143(1)(a), Explanation to Section 36(1)(vii) was not in the statute because though introduced with retrospective effect, it was in fact brought to the statute only by Finance Act 2001. Against this, counsel for the Revenue contended that even de hors the Explanation, the provision for bad debt is a prima faci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecisions of the Supreme Court in Sutlej Cotton Mills Ltd. v. Commissioner of Income-tax, West Bengal reported in (1979) 116 ITR 1 and in Kedarnath Jute Manufacturing Company Ltd. v. Commissioner of Income-tax reported in (1971) 82 ITR 363 and contended that provision for bad debt claimed by the assessee is not a prima facie inadmissible claim. We do not find the decisions cited by the assessee are on the point. We also do not agree that the assessee being a Scheduled Bank, it's claim has to be treated differently because we find from the regular assessment produced in court that assessee has made separate claim under Section 36(1)(vii)(a) in terms of RBI guidelines pertaining to advances made in rural areas. Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he claim was only a provision for bad debt, we are of the view that the claim is prima facie inadmissible under Section 36(1)(vii) as the Section does not authorize granting of deduction of any debt unless it is written off in the accounts for the previous year. We are therefore of the view that the claim is rightly treated as prima facie inadmissible and no enquiry or hearing is required to disallow the claim because assessee itself has no case that the amount was written off in the accounts which only qualifies it for deduction under the said Section. Therefore, the decision of the Delhi High Court in Samtel Color Ltd. v. Union of India (2002) 258 ITR 1 relied on by the assessee has no application. The next issue to be considered is scope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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