2014 (6) TMI 943 - HC - Income Tax

Appeal admitted on the following substantial questions of law a) Whether, the Income Tax Appellate Tribunal was right in holding that the provisions of Section 36(1)(viia) of the Income Tax Act, 1961 do not apply to bad debts report of two advances made by nonrural branches particularly after the insertion of Explanation 2, after the renumbered Explanation 1 to clause (viia) of subsection (1) of Section 36 by the Finance Act, 2013 with effect from 01st April, 2014? (b) Whether, on the facts and circumstances of the case and in law, the Tribunal was justified in deleting the addition on account of reversal of unrealized interest? (c) Whether, the reversal of interest was permitted in law in view of the specific provisions of Section 43D of the Income Tax Act, 1961 according to which such interest is taxable in the year of credit or receipt whichever is earlier? (d) Whether, on the facts and circumstances of the case and in law, the Tribunal was justified in deleting the addition on account of provision for Rural Advances and provision against bad and doubtful debts?

Summary

The Bombay High Court admitted appeals raising substantial questions of law regarding the application of Section 36(1)(viia) of the Income Tax Act, 1961 to bad debts report, reversal of unrealized interest, and provisions for rural advances and bad debts. The Respondent/Assessee waived service, and the appeals will be heard along with the Income Tax.