https://www.taxtmi.com/caselaws?id=65392 RBI prudential norms may require an NBFC to provide for non-performing assets, but that regulatory provision does not by itself qualify as a deduction under the Income-tax Act because section 36(1)(vii) allows only bad debts actually written off and excludes mere provisions for doubtful debts. The statutory scheme also shows that the special deduction in section 36(1)(viia) was not extended to NBFCs. Where the original provision is disallowed, later recoveries of the NPAs are treated as recovery of capital in the first instance, so they are not taxed as income in the same manner as a section 41(4) recovery and corresponding relief applies in later-year computation. en-us Fri, 26 Oct 2007 00:00:00 +0530 Tue, 30 Jan 2024 14:30:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=65392 RBI prudential norms may require an NBFC to provide for non-performing assets, but that regulatory provision does not by itself qualify as a deduction under the Income-tax Act because section 36(1)(vii) allows only bad debts actually written off and excludes mere provisions for doubtful debts. The statutory scheme also shows that the special deduction in section 36(1)(viia) was not extended to NBFCs. Where the original provision is disallowed, later recoveries of the NPAs are treated as recovery of capital in the first instance, so they are not taxed as income in the same manner as a section 41(4) recovery and corresponding relief applies in later-year computation. Case-Laws Income Tax Fri, 26 Oct 2007 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=65392