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TMI Blog2012 (9) TMI 610X X X X Extracts X X X X X X X X Extracts X X X X ..... ich was not made before the A.O. The same should have either been admitted under Rue 46A of the I.T. Rules, 1962 and by having a remand report from the A.O. The same has not been done by the CIT(A). Therefore, the order of CIT(A), at the outset, is against the principles of natural justice and deserves to be reversed. Hence, matter is set aside to the file of the A.O. who will examine the claim of the assessee and find out whether the provisions made is a provision for bad and doubtful debts, first and if so thereafter apply the limit as provided under clause (a) to section 36(a)(viia) - Decided in favor of assessee for statistical purposes. - I.T.A. No. 443(Asr)/2011 - - - Dated:- 14-6-2012 - SH. H.S. SIDHU, AND SH. B.P. JAIN, JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee was asked vide order sheet entry dated 16.12.2010 to file the details of standard assets provisions created during the year and show cause why this amount may not be added to your assessable income. The assessee vide this letter dated 28.12.2010 replied as under: In continuation of our previous reply dated 13.12.2010 and in response to further queries putforth by your goodself telephonically, we may submit that we have created provision for bad doubtful debts amounting to RS. 50 lacs during the year under consideration and it includes Rs.36,75 lacs against standard assets and balance against other assets. We may add here that the provision for Bad Doubtful Debts is an allowable expenses u/s 36(1)(viia) of Income Tax subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een applicability of section 36(1)(vii) and section 36(1)(viia) of the Income Tax Act in clauses (i) to (iv) of the instructions. It has only explained the way in which limits specified in section 36(1)(viia) has to be calculated. Nowhere in these instructions any question has been raised on the allowability of provision made against standard assets. It is therefore crystal clear that provision made by the bank for bad doubtful debts is very much fulfilled in our case. We hope it will satisfy your goodself and our assessment will be completed on returned income. However, after considering the reply filed by the assessee the said provision amounting to Rs.36,75,000/- is being disallowed in the light of the provision of section 36(1)(v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... planation put-forth before the Ld. CIT(A) was not available before the AO. The Ld. CIT(A) should not have decided the matter without admitting the same as an additional evidence as per Income Tax Rules, 1962 and without having the remand report of the AO. Moreover, as per section 36(viia), the deduction allowable is in respect of any provision for Bad and Doubtful Debts made by the Bank or Society referred to in that section. It was argued, first of all, it has to be a provision for bad and doubtful debts, which in the present case, the assessee itself has admitted at Rs.13.25 lakhs The provision against standard assets for Rs.36.75 lakhs cannot be said to be a provision for bad and doubtful debt and therefore, once it is not the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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