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TMI Blog2007 (2) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... terest accrued as at the end of the assessment year is not to be taken ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the claim of bad debts in relation to non-rural branches of the assessee bank is allowable without first setting off against the provision already allowed under section 36(1)(viia) when no distinction is made between advances relating to non-rural and rural advances has been made in section 36(1)(vii) ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the reduction of Rs. 47,38,984 claimed by the assessee-bank as diminution in the value of investments is allowable when the loss has been claimed only on notional b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng regularly employed by the assessee, and as the assessee was following the accrual basis for recording interest in the books of account, included the interest on accrual basis for computing the total income. 3. With regard to the claim of the assessee qua bad debts written off, the Assessing Officer, observing that as per the proviso to section 36(1)(viia) of the Act, any bad debt in excess of the provision has to be disallowed and the section does not distinguish the debt that is arising from urban advances and rural advances, rejected the stand of the assessee that the provision referred to in section 36(1)(viia) relates only to the rural branches and does not apply to bad debts of urban branches, and held that the actual bad debts irr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SC), Godhra Electricity Co. Ltd. v. CIT [1997] 225 ITR 746 (SC) held that the assessee is taxable for interest on securities only on specified dates when it becomes due for payment, in view of the third proviso to section 145(1) of the Act, which was in force during the relevant assessment years. 8. In view of the ratio laid down in the decisions referred to supra, the first substantial question of law raised in T. C. (A) No. 22 of 2004 and the first substantial question of law raised in T. C. (A) No. 466 of 2004 are answered in favour of the assessee and against the Revenue. 9. With regard to the second question of law in T. C. (A) No. 22 of 2004, the only question of law in T. C. (A) No. 196 of 2004 and the second question of law in T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the amount written off in the books relating to advances made by the rural branches during the previous year relevant to the assessment year and the credit balance in the provisions for bad and doubtful debts account relating to advances made by the rural branches made under clause (viia). If the bad debt written off relates to debts other than for which provision is made under clause (viia) such debt will fall squarely under the main part of clause (vii) which is entitled to deduction and in respect of that part of the debt with reference to which a provision is made under clause (viia), the proviso will operate to limit the deduction to the extent of the difference between that part of debt written off in the previous year and the credi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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