2025 (12) TMI 152

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....aimed a deduction in relation to the provisions made in its accounts for bad debts, particularly, in relation to the branches that were situated in rural areas. However, the authorities below found that some of the branches were not situated in rural areas and disallowed the claim of the appellant in relation to those branches. 13. The learned Senior Counsel would submit that the issue as to whether or not the area in question merits classification as rural area or urban area, is currently pending resolution before the Supreme Court. Before us, however, the limited prayer is to remit the matter to the Appellate Tribunal for examining whether, in the event of a claim not succeeding under Section 36(1)(viia) of the Act, the appellant....

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....t the said return of income, the assessment was completed by ACIT, Circle-1(1), Thrissur (for short, 'AO'). vide order dated 20/12/2017 passed u/s. 143(3) of the Income Tax Act, 1961 (for short, 'the Act') at a total income of Rs. 1157,56,82,6008/-. While doing so, the AO made the following disallowances:- (i) An amount of Rs. 11,36,18,730/- u/s. 14A of the Act by holding that assessee is unable to make a one to one relation between the interest free funds and the investment in shares which has yielded the dividend. (ii) An amount of Rs. 47,56,61,323/- u/s. 36(1)(viia) of the Act by holding that an amount of eligible deduction u/s. 36(1)(viia) comes to only Rs. 1,77,95,608/- as against the claim of Rs. 225,....

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....1)(vii) of the Act in terms of the directions extracted (supra). That is how, the matter had arisen before us. 6. The authorized representative of the assessee submits that the amount of disallowance made u/s. 36(1)(viia) qualifies for deduction u/s. 36(1)(vii) of the Act. In nutshell, the gist of submission is that the amount of provision disallowed u/s 36(1)(viia) can be utilized for the purpose of making a claim for deduction u/s 36(1)(vii) of the Act as it amounts to a write off of debts in terms of judgment of Hon'ble Supreme Court in M/s. Vijaya Bank vs. CIT (2010) 323 ITR 166. He submits that the assessee-bank made the provision for bad and doubtful debts to the extent of Rs. 344.90 crores by debiting to the profit & loss acco....