TaxTMI 
TaxTMI 
2023 (8) TMI 595
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The revenue is in appeal before us against the order dated 07.11.2019 of the Income Tax Appellate Tribunal, Cochin Bench in I.T. Appeal No. 191/Coch/2019 pertaining to the assessment year 2015- 2016. The respondent assessee is a scheduled bank with Head Office at Thrissur. It had filed its return of income for the assessment year 2015- 2016 on 28.09.2015, declaring a net loss of Rs. 283,37,80,796/-. While the assessment under Section 143(3) of the Income Tax Act was completed on 07.12.2017, by disallowing an amount of Rs. 1,80,04,849/- under Section 14A of the Income Tax Act, the said order was set aside by the Principal Commissioner of Income Tax, Thrissur, by an order dated 18.12.2018 finding the assessment order as erroneous and pre....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... ITR 166 (SC)]. 3. In the appeal before us, the revenue impugns the order of the Tribunal and raises the following substantial questions of law:- 1. Whether on the facts and in the circumstances of the case and considering the facts presented before and considered by the Assessing Officer vis-a-vis the Principal Commissioner's conclusion on examination of the records, is not the consequential order of the Pr. Commissioner interfering with the assessment order legal and in accordance with law? 2. (a) Whether on the facts and in the circumstances of the case and in the light of the facts and figures found by the Principal Commissioner on an examination of records demonstrate the order of the Assessing Officer as an or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on, we may reiterate that it is not in dispute that section 36(1)(vii) of the 1961 Act applies both to banking and non-banking businesses. The manner in which the write off is to be carried out has been explained hereinabove. It is important to note that the assessee-bank has not only been debiting the profit and loss account to the extent of the impugned bad debt, it is simultaneously reducing the amount of loans and advances or the debtors at the year-end, as stated hereinabove. In other words, the amount of loans and advances or the debtors at the year-end in the balance-sheet is shown as net of the provisions for the impugned debt. However, what is being insisted upon by the Assessing Officer is that mere reduction of the amount of loan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ubsequent years. There is also a flipside to the argument of the Department. The assessee has instituted recovery suits in Courts against its debtors. If individual accounts are to be closed, then the debtor/defendant in each of those suits would rely upon the bank statement and contend that no amount is due and payable in which event the suit would be dismissed." 6. In the appeal before us, the essential contention of the revenue is that in the case of the assessee herein, the Appellate Tribunal failed to verify whether, as a matter of fact, the assessee had reduced the value of its assets in an amount equivalent to the amount claimed by way of bad debts that were allegedly written off as irrecoverable. It is pointed out that the Suprem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r a copy of the printed balance sheet and profit and loss account of the assessee company for the year 2014-2015. A perusal of the said balance sheet, however, does not show that the assessee had, in fact, reduced the value of its assets by a figure corresponding to the bad debts written off by it. The learned Senior counsel for the assessee, however, brings to our notice an additional document titled "Schedule of advances as on 31.03.2023", which shows that the advances shown in the balance sheet is the net figure arrived at after reducing the provisions made for NPA (including bad debts written off and write back). It is also his submission that this document forms part of the audited balance sheet and profit and loss account, although it....