2009 (9) TMI 12

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.... Deepak Gupta, J. - This appeal by the Revenue has been admitted on the following questions of law: "1. Whether the Ld. ITAT was right in law in holding that the bad debts of Rs.19,04,000/- had been written off in the books of account, even though no corresponding entries to this effect had been made in the individual accounts of the loanees and thus the mandatory condition laid down in Secti....

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....e was not entitled to claim deduction in respect of rs.19.04 lakhs. According to the Assessing Officer these debts had not been written off in the individual loans of the Company. An Appeal was filed by the assessee before the CIT (Appeals) who came to the conclusion that the HPFC was maintaining accounts under the cash system of accounting and had undertaken that in case recoveries are made from ....

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....) of the Income Tax Act at the relevant time read as follows: "36(vii-a) in respect of provision for bad and doubtful debts made by - c) a public financial institution of a State Financial Corporation or a State Industrial Investment Corporation, an amount not exceeding 5% of the total income (computed before making any deduction under this clause and chapter VI-A)" This section was inser....