TaxTMI 
TaxTMI 
2014 (8) TMI 604
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....e Tribunal was right in holding that in the case of the assessee bank, interest on securities has to be assessed only on the basis of the interest due on the half-yearly due dates and the interest accrued as at the end of the assessment year is not be taken? 2. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the claim of bad debts in relation to non-rural branches of the assessee bank is allowable without first setting off against the provision already allowed under Section 36(1)(viia), when no distinction is made between advances relating to non-rural and rural advances has been made in Section 36(1)(vii)?" 2. We have heard the learned counsel on either side and perused the order of the T....
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....erred supra, the first substantial question of law raised in T.C.(A) No.22 of 2004 and the first substantial question of law raised in T.C.(A) No.466 of 2004 is answered in favour of the assessee and against the revenue. 5.1. With regard to the second question of law in T.C.(A) No.22 of 2004, the only question of law in T.C.(A) No.196 of 2004 and the second question of law in T.C.(A) No.466 of 2004, the learned counsel for the assessee submitted that a similar issue has been answered in favour of the assessee in South Indian Bank Ltd. v. Commissioner of Income-tax, [2003] 262 ITR 0579. 5.2. The Division Bench of Kerala High Court in South Indian Bank Ltd. Case referred supra, held that: 'The proviso to clause (vii) of section 36(1) a....
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....is made under clause (viia) such debt will fall squarely under the main part of clause (vii) which is entitled to deduction and in respect of that part of the debt with reference to which a provision is made under clause (viia), the proviso will operate to limit the deduction to the extent of the difference between that part of debt written off in the previous year and the credit balance in the provision for bad and doubtful debts account made under clause (viia).' 5.3. In the instant case, while allowing the claim for bad debts written off in respect of advances made by rural branches, the Commissioner of Income Tax (Appeals) as well as the Tribunal, was of the firm opinion that the assessee has not claimed any debts written off in re....