2014 (9) TMI 1217

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....dition as the case of Supreme Court as cited by the assessee in the case of Vijaya Bank vs CIT reported in 323 ITR 166(SC) was not applicable only for the banks and not for other assesses. On appeal, the CIT(A) was in agreement with the contention of the AO that provision for bad and doubtful debts was allowable only in the case of banks and there was no provision for claiming such deduction by any other class of assesses. According to the CIT(A), this provision was clearly spelt out in the Explanation to sec. 36(1)(vii), wherein it has been clearly laid down that for the purpose of this clause, any bad debt or part thereof written off as irrecoverable in the accounts of the assessee shall not include any provision for bad and doubtful debt....

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....assessee to written off the debts and claim that it is deduction while computing the income. The provisions of sec. 36(1)(vii) has been amended by insertion of Explanation with retrospective effect from 1.4.1989 by Finance Act 2001 and as per this Explanation, bad debts written off in the accounts of the assessee shall not include in the provisions of bad and doubtful debts made in the accounts of the assessee. 4.1 The Hon'ble Supreme Court in the case Southern Technologies Ltd. v. Joint Commissioner of Income-tax reported in 320 ITR 577 wherein it has been it has been held as under: "In 1989 by the insertion of a new Explanation in section 36(1)(vii) of the Income-tax Act, 1961, a dichotomy was brought in and it has been clarif....