TaxTMI 
TaxTMI 
2023 (6) TMI 1541
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....the case and in law and in view of provisions of section 36(1)(viia) and section 36(2): clause (i) thereof of the Act, the bad debts declared as Non Performing Assets before 01.04.2006 are allowable as deduction u/s. 36(1)(vii) of the Act being bad debt written off disregarding section 36(1)(vii) of the Act? 2. The appellant prays that the order of the CIT(A) on the above ground be set aside and that of the AO be restored 3. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary 2. The assessee is a co-operative bank and filed a return of income for A.Y. 2012-13 on 17/09/2012 declaring a total income of Rs. 93,92,49,840/-. The return was selected for scrutiny under CASS and t....
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....d that you have written off Rs. 6,34,25,145/- as Bad Debts during the year under consideration. You also mentioned that you have claimed Rs. 4,21,14,192/- as bad debts u/s 36(1)(vii) of the Act. It is also noted that you have opening balance of Provision for Doubtful Debts as on 01.04.2011 created u/s 36(1)(viia) of the Act is Rs. 19,96,39,699/-. Thus the bad debts should have been claimed first against this provision and, ' later if any, should have been claimed u/s 36(1)(vii) of the Act. There is no such provision in the Act to differentiate the different category of debts. Further provision s created for all the debts including older debts. Thus the plea of the assessee is that the bad debts belong to the debts given prior to the cre....
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.... on doubtful assets and substandard assets. A provision towards Bad and Doubtful Debts Reserve (BDDR) has been created year on year basis as per RBI requirements by debiting to profit and loss account. As on 31.03.2006, Bank had provision towards Bad and Doubtful Debts Reserve of Rs.1,86,48,51,000/- which was disallowed in the respective assessment years in which the provisions were made. During the Financial Year 2011-12, Bank had written off Rs.6,34,25,145/- as Bad Debts. The Bad Debts were written off by utilising the provision created for the same. Out of the total bad debts written off Rs.4,21,14,192/- was written off against the BDDR provisions made before 1.4.2006 (as these advances were classified as NPA before 31.3.2006) i.e. befor....
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.... the Revenue is in appeal before the Tribunal. 6. The Ld.AR submitted that the issue is held in favour of the assessee by the co ordinate bench in assessee's own case for AY 2010-11 which is relied on by the CIT(A) and also the subsequent assessment year 2011-12. Accordingly the ld AR submitted that the issue is already covered in favour of the assessee. 7. The Ld. DR, on the other hand, relied on the order of the Assessing Officer. 8. We heard the parties and perused the material available on record. We notice that the co-ordinate bench of the Tribunal in assessee's own case for A.Y. 2011-12 has considered the similar issue and held that - "8. Considered the rival submissions and material placed on record, we observed tha....
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....ade by the rural branches of such banks. The provisions of Section 36(1)(vii) and section 36(1)(viia) are distinct and independent. The provisions of Section 36(1)(viia)are applicable w.e.f. A.Y. 2007-08 to cooperative bank also. Therefore any provision allowed in A. Y. 2007-08 onwards in the case of a cooperative bank under clause (viia) will be hit by this amendment but a provision standing in the account of a cooperative bank prior to 01.04.2006 will not come in the ambit of section 36(1)(viia) and in our opinion if any bad debts written off for which a provision has been created prior to 01.04.2006 will be entitled for deduction under section 36(1)(viia) if the conditions stipulated under section 36(2) are satisfied. From the chart: as ....