TaxTMI 
TaxTMI 
2020 (11) TMI 258
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....vely arising in the assessment order dated 20.03.2013, 31.12.2014 & 21.12.2016 respectively, passed by the Assessing Officer (AO) under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2010-11, 2012-13 & 2014-15. 2. The issues involved being common, all the captioned appeals of the assessee have been heard together and are being disposed of by common order. ITA No. 3468/Ahd/2016 (A.Y. 2010-11) 3. The grounds of appeal raised by assessee read hereunder: "1.1 That the ld. CIT (A) has erred in confirming the disallowance of Rs. 48,34,350 being claim of bad debts written off to bad and doubtful debt reserve account. 1.2 That the various reasons advanced by the learned CIT(Appeal) in confirming the disallo....
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....ovisions for bad debts under s. 36(1)(viia) r.w.s. 36(2) of the Act in the light of provisions of Section 36(1)(viia) of the Act as amended w.e.f. A.Y. 2007-08. In elaboration, it was submitted that the deduction under s. 36(1)(viia) has been made available to co-operative bank w.e.f. AY 2007-08 onwards. The assessee has accordingly claimed deduction towards provisions made in terms of Section 36(1)(viia) of the Act amounting to Rs. 28,42,274/-. The assessee has simultaneously also claimed bad debts actually written off amounting to Rs. 48,34,350/- under s. 36(1)(vii) of the Act in relation to outstanding debts of the earlier years for which the provisioning has not been made or claimed since the entitlement of deduction for provisioning of....
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....ge and thus the issue justifiably requires to go back to the file of the AO for suitable verification on this count. It was contended that where the debts written off are found to be independent of debts for which provisions have been made, the deduction under s. 36(1)(vii) of the Act is allowable independently and irrespective of provision for bad debts created by the Scheduled Bank in relation to advances made by its rural branches, subject to limitation that an amount should not be deducted twice under s. 36(1)(vii) & Section 36(1)(viia) of the Act simultaneously. 5. Adverting to the 2nd issue on account of renovation expenditure of capital nature amounting to Rs. 13,85,272/-, the learned Senior Counsel adverted to a representation da....
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....eas provision for bad debt under s. 36(1)(viia) of the Act was made with reference to rural branches. Thus, the claim made under s. 36(1)(vii) and 36(1)(viia) of the Act were found to be of different genre which is not shown in the instant case. In a rejoinder to the aforesaid observation, the learned senior counsel for the assessee however submitted that the distinctive point in the present case is that the eligibility of deduction under s. 36(1)(viia) of the Act on account of provisions for bad debt was not available at all to the assessee prior to AY 2007-08. The bad debts claimed on account of actual write off relates to loans/advances made in the assessment years prior to the applicability of provisions of Section 36(1)(viia) of the Ac....
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....een availed under s. 36(1)(viia) of the Act in any manner. In the light of the decision of the Hon'ble Supreme Court in case of Catholic Syrian Bank Ltd. vs. CIT(A) [2012] 18 taxmann.com 282 (SC), we are of the view that Section 36(1)(vii) & 36(1)(viia) of the Act are distinct and independent items of deduction and operate in their respective fields. So long as the claim of bad debt does not overlap or result in dual deduction, one on account of provision of bad debt and another at the time of actual write off, there is not statutory bar in making the claim under two provisions. 8.2 On facts, it is the case of the assessee that the bad debts actually written off are out of loans & advances made prior to AY 2007-08 for which no provis....
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.... Rs. 13,85,272/- owing to mistake on the part of the assessee in making excess disallowance. We straight away observe that this issue also requires to go back to the file of the AO for factual verification of excessive disallowances wrongly made by the assessee as claimed. The AO shall grant suitable relief to the assessee where it is found that the assessee has wrongly reported excessive taxable income in its return of income indeed owing to inadvertent mistake of excessive disallowance on the point. Needless to say, the assessee shall fully cooperate in the proceedings before the AO for determination of the point afresh in accordance with law. 10. Ground No. 2 of the assessee's appeal is allowed for statistical purposes. 11. In ....