2014 (10) TMI 886

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....Respondent : Sri G. Sarangan, Senior Advocate for Sri K.S. Ramabhadran, Advocate) J U D G M E N T The revenue has preferred this appeal against the order passed by the Tribunal. 2. The substantial question of law which arise for consideration in this appeal is as under:- Whether the appellate authorities were correct in holding that the bad debt claim made by the assessee which was dis....

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....llowance of the bad debts. The legislative intent was to encourage rural advances and the making of provisions for bad debts in relation to such rural branches. Another material aspect of the functioning of such banks is that their rural branches were practically treated as a distinct business, though ultimately these advances would form part of the books of accounts of the principal or head offic....

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....the case in hand. Interpretation and Construction of Relevant Sections 25. The language of Section 36(1)(vii) of the Act is unambiguous and does not admit of two interpretations. It applies to all banks, commercial or rural, scheduled or unscheduled. It gives a benefit to the assessee to claim a deduction on any bad debt or part thereof, which is written off as irrecoverable in t....

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....nd doubtful debts made in the account of the assessee from the ambit and scope of `any bad debt, or part thereof, written off as irrecoverable in the accounts of the assessee'. Thus, the concept of making a provision for bad and doubtful debts will fall outside the scope of Section 36(1)(vii) simplicitor. The proviso, as already noticed, will have to be read with the provisions of Section 36(1....