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TMI Blog2012 (6) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... R GOEL, AJAY KUMAR MITTAL, JJ. JUDGMENT Ajay Kumar Mittal J.- 1. This appeal under section 260A of the Income-tax Act, 1961 (for short "the Act'"), has been filed by the assessee against the order dated August 20, 2003, passed by the Income-tax Appel- late Tribunal, Chandigarh Bench (B), Chandigarh (in short "the Tribunal"), in I. T. A. No. 316/Chandi/98 relating to the assessment year 1995-96. 2. The assessee has claimed the following questions for determination by this court : "(a) Whether, under the facts and circumstances of the case and on the true and correct interpretation of the provisions of section 36(1)(vii), 36(1)(viia), the Tribunal is justified in upholding the dis- allowance of deduction of Rs. 19,77 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order dated February 7, 1997, annexure A 3, at the income of Rs. 4,35,03,060. 4. Aggrieved by the order of the assessing authority, the assessee filed appeal. This claim of the assessee in appeal was dismissed by the Com- missioner of Income-tax (Appeals) (for short "the CIT(A)"), vide order dated January 5, 1998, annexure A 2, which was affirmed by the Tribunal, vide order dated August 20, 2003, annexure A 1. 5. This is how the assessee has filed the present appeal. 6. We have heard learned counsel for the parties and have perused the record. 7. The claim of the assessee was that the provision which was made by the assessee during the year amounting to Rs. 19,77,535, was admissible as deduction. 8. In order to effecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -scheduled bank referred to in this sub-clause shall, at its option, be allowed in any of the relevant assessment years, deduction in respect of any provision made by it for any assets classified by the Reserve Bank of India as doubtful assets or loss assets in accordance with the guidelines issued by it in this behalf, for an amount not exceeding five per cent. of the amount of such assets shown in the books of account of the bank on the last day of the previous year. (b) a bank, being a bank incorporated by or under the laws of a country outside India, an amount not exceeding five per cent. of the total income (computed before making any deduction under this clause and Chapter VI-A) ; (c) a public financial institution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bad and doubtful debts has been allowed under section 36(1)(viia), there can be no deduction under section 36(1)(vii) in view of the provisions of section 36(2)(v) of the Act. 10. The Tribunal held that the assessee had created provision for bad and doubtful debts during the year under section 36(1)(viia) and the said amount had to be reduced from the actual bad debts claimed under section 36(1)(vii) in view of the proviso appended thereto. The findings recorded by the Tribunal are as under : "We find that the assessee has created a provision for bad and doubtful debts under section 36(1)(viia) amounting to Rs. 19,77,535. In addition to that there was already a credit balance in the provision for bad and doubtful debts for the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch 31, 1993 3,97,594 Provision made during the year ending March 31, 1994 5,91,250 Provision made during the year ending March 31, 1995 19,77,535 Total 29,66,379 Thus, as on March 31, 1995, the credit balance in the previous year for bad and doubtful debts consists of not only the provision made for the year ending March 31, 1993, and March 31, 1994, but also the provision made for the year 1995. The proviso does not distinguish the time when the bad debt was written off or when the provision for bad and doubtful debts has been made for the previous year. The income-tax is leviable on the income computed for a previous year. The deduction allowable to the assessee also relate to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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