2018 (2) TMI 1468

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.... Year 2007-08, raising the following substantial question of law: "Whether on the facts and in circumstances of the case, the Tribunal is right in law in confirming the order of Commissioner of Income Tax (Appeal) in allowing the assessee's claim for written back of excess provision for bad and doubtful debts?" 2. The assessee-respondent is a Rural Regional Bank, governed by Banking Regulation Act, 1949. The Assessment was concluded under Section 143(3) of the Act by the assessing authority making certain additions to the return of income filed. Additions relating to the excess provision of bad and doubtful debts of Rs. 8,17,83,534/- is the issue involved in this appeal. The assessment order passed adding back an amount of Rs. 8,17,83....

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....ct. 5. We have given our anxious consideration to the arguments advanced by the learned counsel appearing for the respective parties and perused the material on record. 6. The Tribunal being last fact finding authority has categorically held that the excess provision of Rs. 8,17,83,534/- for bad and doubtful debts existed in the books was written back by the assessee; however, it is not the case of the revenue that the excess provision written back in the profit and loss account had also been allowed as deduction in the past assessment of total income of the assessee. With these factual findings, what can be inferred is that no material was placed on record to establish the fact that the excess provision of Rs. 8,17,83,534/- was allow....

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.... of business or profession and accordingly chargeable to income-tax as the income of that previous year, whether the business or profession in respect of which the allowance or deduction has been made is in existence in that year or not. 8. A conjoint reading of these provisions contemplates that if an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability and the same is written back in the books of accounts, the said written back expenditure, loss or trading liability shall be eligible to levy of tax as income. The burden lies on the Revenue to prove that the provision for bad and doubtful debts written back was allowed as expenditure reducing profit in the profits and l....