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Issues involved:
The judgment involves the issue of deduction for bad and doubtful debts under sections 36(1)(vii) and 36(1)(viia) of the Income Tax Act. Details of the Judgment: Issue 1: Deduction for bad and doubtful debts under section 36(1)(vii) and 36(1)(viia) of the Act The appeal was filed by the assessee against the order of the Commissioner of Income-tax (Appeals) for the assessment year 2006-07. The assessee, a public sector undertaking, had received COD approval only for one ground of appeal before the Tribunal. The other grounds of the assessee were rejected due to the absence of COD approval. The specific ground of appeal, No.4, raised by the assessee challenged the CIT(A)'s decision regarding the provisions under section 36(1)(viia) of the Act. The counsel for the assessee argued that the assessee is entitled to deduction for bad and doubtful debts separately under sections 36(1)(vii) and 36(1)(viia) of the Act. The Tribunal noted that while the CIT(A) directed the Assessing Officer to verify and allow the claim made under section 36(1)(vii), no such direction was given for the claim made under section 36(1)(viia). After considering the submissions, the Tribunal held that the Assessing Officer should verify the claim made under section 36(1)(viia) in light of various court decisions cited by the assessee, and directed to allow the deduction after providing a reasonable opportunity of hearing to the assessee. Therefore, the appeal of the assessee was partly allowed for statistical purposes, with the direction to verify and allow the deduction claimed under section 36(1)(viia) of the Act. Order pronounced in the court on 6.8.2010.
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