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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 ..... smissed - P. D. Dinakaran And Mrs. Chitra Venkataraman JJ. For the Appellant : Muralikumaran For the Respondent : V. D. Gopal JUDGMENT 1. P. D. Dinakaran J. The above tax case appeals were admitted on the following questions of law : T. C. (A) No. 22 of 2004 : 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that in the case of the assessee bank interest on securities has to be assessed only on the basis of the interest due on the half-yearly due dates and the interest 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be taken ? and 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) ? 2. The Assessing Officer, observing that interest on securities was to be assessed in accordance with the method of accounting 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (A) No. 466 of 2004, the Division Bench of this court by judgment dated January 23, 2007 made in T. C. (A) Nos. 15 and 24 of 2003 (CIT v. Tamilnadu Mercantile Bank Ltd. [2007] 291 ITR 137 (Mad), after referring to the decisions in CIT v. Canara Bank [1992] 195 ITR 66 (Karn), CIT v. Shoorji Vallabhdas and Co. [1962] 46 ITR 144 (SC), H. M. Kashiparekh and Co. Ltd. v. CIT [1960] 39 ITR 706 (Bom), Poona Electric Supply Co. Ltd. v. CIT [1965] 57 ITR 521 (SC), Morvi Industries Ltd. v. CIT [1971] 82 ITR 835 (SC), State Bank of Travancore v. CIT [1986] 158 ITR 102 (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given to a scheduled bank. A scheduled bank may have both urban and rural branches and advances given from both branches. Having regard to the hazards involved in realising the advances made by rural branches particularly to agriculturists, certainly the assessee-bank might prefer to make provision for bad debt in respect of advances made in the rural branches. As a result of the amendment the scheduled bank will be entitled to the deduction of the entire bad debt relating to advances made by the urban branches written off in the books and also the difference between 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 prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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