2012 (11) TMI 1221 - AT - Income Tax

Summary

Issues involved: Appeal against the order of CIT (A) for the assessment year 1996-1997 regarding the allowance of bad debts u/s 36(1)(viia) of the IT Act.

Grounds raised by Revenue:
1. CIT (A) order is opposed to law and facts.
2. CIT (A) erred in allowing the amount of Rs. 105,99,46,975 as bad debt u/s 36(1)(viia) when Rs. 26.69 crores was already allowed u/s 36(1)(vii).
3. Request to set aside CIT (A) decision and restore that of the AO.

Details of the Judgment:
The appeal filed by the Revenue challenged the CIT (A) order allowing Rs. 105,99,46,975 as bad debt u/s 36(1)(viia) for the assessment year 1996-1997. The Revenue contended that this amount should not be allowed as a deduction under this section as Rs. 26.69 crores had already been allowed u/s 36(1)(vii). The Ld Counsel for the assessee argued that the provision for bad debts should be set off against Rural debts only, citing a Supreme Court judgment in the case of Catholic Syrian Bank Ltd. The Tribunal considered the Supreme Court judgment and previous decisions in the assessee's favor, ultimately dismissing the Revenue's appeal.

Decision and Reasoning:
After hearing both parties and analyzing the Supreme Court judgment in the Catholic Syrian Bank Ltd case, the Tribunal found strength in the assessee's claim. The Tribunal noted that the CIT (A) had correctly followed the Supreme Court's decision in the assessee's own case for relief. Given the settled nature of the issue at the Supreme Court level, the Tribunal concluded that the CIT (A) order did not require any interference. Consequently, the grounds raised by the Revenue were dismissed, and the appeal of the Revenue was also dismissed.