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TMI Blog2014 (2) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be entitled to general deduction upon an account having become bad debt and being written off as irrecoverable in the accounts of the assessee for the previous year – Decided in favour of Assessee. Disallowance of claim for leave encashment – Held that:- The opinion of the Tribunal so far as disallowance claimed in respect of leave encashment under Section 43B(f) of the Act, as on today, the provision seems to be in force in the light of the stay order granted - as long as Section 43B(f) is on Statute, the disallowance is justified. Trade surplus on sale of jewellery - Whether the Tribunal is correct in holding that the surplus outstanding in the appellant's accounts acquired the character of trade surplus when the appellant had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the surplus outstanding in the appellant's accounts acquired the character of trade surplus when the appellant had not credited the said sum in their P L account and there is nothing to show that there is cessation of the liability ? 2. The appellant Bank is before us for the assessment year 2006-07. In the above three substantial questions of law, the first issue refers to disallowance of 'bad debt' claimed under Section 36(1)(vii). The second issue is disallowance of 'leave encashment' claimed. The third issue is addition of an amount on account of 'jewellery sales surplus'. 3. So far as the first substantial question of law; the Assessing Officer disallowed the claim of the appellant under Section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the Assessing Officer reversing the opinion of CIT(Appeals). Aggrieved by the same, the appellant/assessee is before us. 5. The argument of learned counsel appearing for the assessee so far as the first issue, i.e. disallowance of Rs. 21,40,05,176/- towards bad debts being written off, he placed reliance on (2012) 343 ITR 270 (SC) in the case of Catholic Syrian Bank Ltd. v. Commissioner of Income Tax. As a matter of fact the Full Bench of High Court of Kerala opined that by virtue of proviso to Section 36(1)(vii) the Bank is entitled to claim such bad debts only to the extent it exceeds the provision created for bad or doubtful debts arising out of rural advances under Clause (viia) of Section 36(1) of the Act. According to the Ape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the first substantial question of law is answered in favour of the assessee. 6. Then coming to the second issue, it pertains to the provision made for leave encashment and the disallowance claimed was under Section 43B(f). As already stated above, the opinion of the CIT(Appeals) was set aside by the Tribunal in the light of the stay order of the judgment of the High Court of Calcutta in Excide Industries case and the SLP stated above is still pending. Therefore, the opinion of the Tribunal so far as disallowance claimed in respect of leave encashment under Section 43B(f) of the Act, as on today, the provision seems to be in force in the light of the stay order granted by the Apex Court in the SLP. Therefore, as long as Section 43B(f) i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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