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TMI Blog2018 (12) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... ts option, be allowed in any of the two consecutive assessment years commencing on or after 1st April 2003 and ending before 1st April 2005, deduction in respect of any provision made by it for any assets classified as doubtful assets or loss assets in accordance with the guidelines issued by it in this behalf, of an amount exceeding ten per cent of the amount of such assets shown in the books of account of such institution or corporation, as the case may be, on the last day of the previous year. Thus, in our view, the proviso carves out an exception from the stipulation in sub-Clause (c) otherwise, the use of the expression at its option would loose its significance. The amendment was brought into the Act by inserting the said proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... latha, Junior Standing Counsel For the Respondent : Mr.Vijayaraghavan and Mr.R.Venkata Narayanan, for M/s.Subbaraya Aiyar Padmanaban JUDGMENT T.S.SIVAGNANAM, J. This appeal by the appellant/Revenue under Section 260A of the Income-tax Act, 1961 (hereinafter referred to as the Act ), is directed against the order passed by the Income-tax Appellate Tribunal C Bench, Chennai dated 12.09.2008, for the assessment year 2003- 04. 2.The appeal was admitted on 27.04.2009, on the following substantial question of law:- Whether on the facts and circumstances of the case, the Tribunal was right in holding that the assessee is entitled to deduction of provision made in respect of doubtful and loss assets under Section 36 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue's appeal. Aggrieved by the same, the Revenue is before us by way of this appeal. 6.It is the submission of Mr.M.Swaminathan, learned Senior Standing Counsel that the proviso to sub-Clause (c) in Section 36(1)(viia), which was inserted by Finance Act, 2002 with effect from 01.04.2003 is dependent upon sub-Clause (c) and in sub-Clause (c), it has been clearly stated that a public financial institution or a State financial corporation like the assessee is entitled to make provision for bad and doubtful debts by an amount not exceeding 5% of the total income computed before making any deduction under the said Clause or under Chapter VI-A. 7.It is the further submission of the learned counsel that unless there is a positive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of bad and doubtful debts in the case of banks and financial institutions. Therefore, the proper method of interpreting the proviso is to give life to the proviso and the intention behind the insertion of the proviso. 10.It is pointed out that a similar proviso is contained under sub-Clause (a) of Section 36(1)(viia) which apply to schedule bank and non-schedule bank and this proviso was inserted with effect from 01.04.2000. Thus, the Central Government proposes the amendment to give a retrieve for State industrial corporation, public financial institution and State financial Corporation giving them an option to claim deduction in respect of any provision made by it for any assets classified by the Reserve Bank of India as doub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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