2021 (1) TMI 83

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..... bts. This mode of debiting the Profit and loss account and then adding back the same amount in computation of total income is tax-neutral. Once the creation of provision did not render reduction in the income, its later reversal, equally, cannot also lead to generation of taxable income notwithstanding the manner of depiction in the accounts. CIT(A) has categorically recorded this fact that in .....

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..... e only issue taken up by the Revenue is against deletion of addition of ₹ 1,67,64,206 made by the Assessing Officer on account of reversal of bad debts provision. 3. Succinctly, the facts of the case are that the assessee, a co-operative bank, debited ₹ 5.00 crore on account of Bad and Doubtful Reserve (being Provision). A sum of ₹ 1,67,64,206 was simultaneously reduced from t .....

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..... crore, after adjustment of ₹ 1.67 crore, was debited to the Profit Loss Account and also added back in the computation of income. In other words, the assessee eventually did not claim any deduction at the time of creation of provision for bad and doubtful debts. This mode of debiting the Profit and loss account and then adding back the same amount in computation of total income is tax-neut .....

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