By TIOL News Service

MUMBAI, APRIL 05, 2018: THE ISSUE BEFORE THE TRIBUNAL IS - Whether a person can claim bad debts u/s 36(1)(vii) over and above the claim and deduction u/s 36(1)(viia) of the Act as this deduction is independent provision - YES IS THE VERDICT.

Facts of the case:

The assessee company had filed return for relevant AY. According to AO, the assessee had claimed full bad debts of Rs. 105,67,43,526/- u/s 36(1)(vii) over and above the claim and deduction u/s 36(1)(viia) of the Act. According to AO bad debt allowable to the assessee was nil and hence, the entire bad debts of Rs. 105,67,43,526 added to the total income of the assessee. On appeal, CIT(A) deleted the addition.

Tribunal held that,

++ the tribunal in earlier years followed the judgment of Supreme Court in the case of Catholic Syrian Bank Ltd. v. CIT, wherein it was held that the assessee was entitled for deduction u/s 36(1)(vii) read with section 36(2)(v) of the Act and also this deduction is independent of provisions made in section 36(1)(viia) of the Act. Accordingly, CIT(A) has rightly allowed the claim of the assessee. This issue of Revenue's appeal is dismissed.

(See 2018-TIOL-496-ITAT-MUM)