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TMI Blog2009 (9) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... individual accounts of the loanees – revenue contented that mandatory condition laid down in Section 36(1)(vii) of the Income-tax Act, was not satisfied – Held that - Admittedly, the Financial Corporation is following the cash system and has written off the bad debts in according with the accounting system following by the Company. There is no error in the order of the ITAT. The first question is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax Act, was not satisfied? 2. Whether in the facts and in the circumstances of the case, the ld.ITAT failed to consider the amended provision of Section 36(1)(viia)(c) of the Income-tax Act, effective from 1.4.1992 vide which the claim for deduction of bad debts has to be restricted to 5%?" The brief facts giving rise to the present appeal are that admittedly the assessee M/s.Himachal Prades ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il suits then the amounts recovered shall be credited to the income under Section 41 of the Income Tax Act, 1961. Following the orders passed for the assessment years 1992-93 and 1993-94, the Commissioner, Income-tax allowed the appeal of the assessee. The Revenue filed an appeal before the ITAT which has been rejected. Hence, the present appeal. The ITAT decided the matter in favour of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .f. 1.4.1992 and therefore applies to the assessment year in question. This section clearly provides that a financial corporation cannot make a provision for a bad debt exceeding 5% of its total income computed before making any deduction under Section 36(vii-a) and Chapter VI-A. Admittedly this section was not taken into consideration by any of the authorities i.e. the Assessing Officer, CITA or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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