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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 ..... 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(1)(viia)(c) in terms of the proviso to that section, even though the assessee did not have any positive profits to set it off from?" 3.Heard Mr.M.Swaminathan, learned Senior Standing Counsel for the appellant/Revenue and Mr.Vijayaraghavan, learned counsel for the respondent/assessee. 4.The assessee is a wholly owned Government of Tamil Nadu co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 income, the question of applying sub-Clause (c) in Section 36(1)(viia) does not arise and the proviso cannot be read independently. 8.We are unable to accept the stand taken by the Revenue for the reason that the proviso to sub-Clause (c) in Section 36(1)(viia) uses the word "at its option". The proviso provided that a public financial institution or a State financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 doubtful assets or loss assets. 11.The proviso also place another condition that those assets should be classified by the Reserve Bank of India as doubtful assets or loss assets in accordance with the guidelines issued by the Reserve Bank of India. 12.Thus, in our considered view, the interpretation given by the CIT(A) and the Tribunal is perfectly valid. Thus, for the above r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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