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TMI Blog2018 (3) TMI 1516X X X X Extracts X X X X X X X X Extracts X X X X ..... h is in general a regular feature of the banking business. It is also pertinent to mention that even though the assessee was eligible to claim much higher amount as an expenditure of “provision for bad and doubtful debts”, it only claimed ₹ 2 lacs. In the instant appeal the contingency provision for standard assets is basically in the nature of bad and doubtful debts only and the assessee has rightly claimed the expenditure u/s 36(1)(viia) of the Act. - Decided in favour of assessee - ITA No. 36/Ind/2017 - - - Dated:- 20-3-2018 - Shri Kul Bharat, Hon ble Judicial Member And Shri Manish Borad, Hon ble Accountant Member Appellant by : Shri S.S. Deshpande Respondent by : Shri R.P. Mourya ORDER Per Shri Manish Borad, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is in appeal before the Tribunal. 4. The learned counsel for the assessee submitted that in the profit and loss account the assessee has not claimed any other expenditure under the head provision for bad and doubtful debts and only an amount of ₹ 2 lacs has been claimed as contingency provision for standard assets which actually is provision for bad and doubtful debts only. He further submitted that as per the provisions of section 36(i)(viia) of the Act the assessee is entitled to provision for bad and doubtful debts to the extent of 7.5% of the total income computed before making any deduction under Chapter VIA and under this clause and, therefore, the claim of the assessee should have been allowed by both the authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he rural branches of such bank computed in the prescribed manner : Provided that a scheduled bank or a non-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: Provided further that for the relevant assessment years commencing on or after the 1st day of April, 2003 and ending before the 1st day of April, 2005, the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the phrase contingency provision for standard assets is basically a provision for bad and doubtful debts only which is in general a regular feature of the banking business. It is also pertinent to mention that even though the assessee was eligible to claim much higher amount as an expenditure of provision for bad and doubtful debts , it only claimed ₹ 2 lacs. We, therefore, in the facts and circumstances of the case, are of the opinion that in the instant appeal the contingency provision for standard assets is basically in the nature of bad and doubtful debts only and the assessee has rightly claimed the expenditure u/s 36(1)(viia) of the Act. We, therefore, allow the sole ground raised by the assessee. 7. In the result, the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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