9911796707
TMI Blog2019 (11) TMI 1800X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Principal Commissioner of Income Tax (PCIT) erred in revising the assessment u/s 263 of the Act, as the assessment made under section 143 (3) of the Act, for the year is neither erroneous nor prejudicial to the interests of the revenue. 3. The learned PCIT ought to have noticed that similar claims which were made on the basis of the interpretation of the term 'bad debts written consistently allowed in the assessments of prior years, relying on the decisions of Hon Apex Court in the case of Vijaya Bank vs. CIT ,reported in 323 ITR 166 (SC) clarifying that if an assessee debits an amount of doubtful debt to the profit and loss account and credits the asset account like sundry debtor's account, it would constitute a write off of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot give a different meaning to it and the learned Principal Commissioner is duty bound to follow it. 7. For the above and other grounds to be adduced at the time of hearing it is prayed that the order passed by the learned Principal Commissioner of Income tax may be cancelled. 3. The facts of the case are that on verification of records, the Pr. CIT observed that the assessee debited an amount of Rs.294,76,94,000/- being provision for NPA included under provisions and contingencies in profit and loss account. While computing the loss returned, the same amount was claimed as bad debt written off u/s.36(1)(vii) of the Act and the claim was allowed by the Assessing Officer vide order dated 07/12/2017. According to the Pr. CIT, the scrutin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.1,73,69,10,000/- as bad and doubtful debts towards NPA and therefore, the assessee is entitled only to the extent bad and doubtful debts actually written off u/s. 36(1)(vii) of the Act. In our opinion, this contention of the CIT(A) is having no merit since this issue was considered by the Supreme Court in the case of Vijaya Bank vs. CIT and Another (323 ITR 166) wherein it was held as under: "Section 36(1)(vii) of the Income Tax act, 1961, dealing with allowance of bad debts written off by the assessee, covers banking as well as non-banking assessees. After April 1, 1989, a mere provision for bad debt will not be entitled to deduction under section 36(1)(vii). If an assessee debits an amount of doubtful debt to the profit and loss ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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