2018 (9) TMI 224

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....be made as to the provision created for such bad and doubtful debts. On facts, it has to be noticed that as evident from the assessment order, there are two components insofar as the assessee is concerned, one is urban and the other is rural. With respect to the urban branches, the claim made by the assessee was more than Rs. 115 crores as having been written off in the previous year to the assessment year, as bad debts. There was a provision made in the earlier year under Section 36(1)(viia) of the Income Tax Act (for brevity "the Act") of Rs. 45 lakhs. The Assessing Officer reduced the claim to the extent of the provision and granted deduction of Rs. 70 crores. The First Appellate Authority reversed the same and granted the entire claim. ....

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....rcumstances the case the Tribunal is correct in law and fact in upholding the action of the authorities below in refusing the claim of the appellant for write off bad debts relating to rural branches amounting to Rs. 24, 53, 972/-? B. Is not the finding of the Tribunal a perverse finding on facts due to non-consideration of relevant facts and one based on surmises and conjectures?" 3. The decision in Catholic Syrian Bank Ltd's case (supra) was on the question whether the deduction on account of provision under Section 36(1)(vii) is independent of the deduction on account of provision under Section 36(1)(viia) of the Act. The Assessing Officer in the said case had directed the deduction claimed under Section 36(1) (vii) to be....

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....the amount by which such claim exceeds the credit balance in the provision made for bad and doubtful debts. Hence, when the bank had made a provision under clause (viia) of Section 36(1) for bad and doubtful debts to the extent of 10% of the rural advances, a subsequent claim for actual write off of bad debts arising insofar as the rural branches are concerned can be allowed only to the extent it exceeds the provision. 6. In the present case, it is clear that the bank had made a provision insofar as the rural advances which evidenced from the books af accounts itself was Rs. 117, 86, 00, 000/-. The claim for actual write off for the subject assessment year is Rs. 24, 53, 000/-, which is far lesser than the provision. Hence, the proviso d....