Held that the claim of bad debts and bad and doubtful debts was an allowable deduction. Court also held that the Tribunal was correct in affirming the order of the Commissioner (Appeals) allowing the claim of provision created under section 36(1)(viia) in respect of advances made by 32 branches which were found to be not “rural branches” by the Assessing Officer. The matter was remitted to the Assessing Officer for a decision in accordance with law. (AY.2003-04)( AY. 2004 -05)
CIT v. South Indian Bank Ltd. (No.1) (2022)445 ITR 480 (Ker.)(HC) CIT v. South Indian Bank Ltd. (No.2) (2022)445 ITR 530 / 289 Taxman 643 (Ker.)(HC)
S. 36(1)(viia) : Bad debt-Provision for bad and doubtful debts-Schedule bank-Entitled to benefit of write off of irrecoverable debts under section 36(1)(vii) in addition to deduction of provision for bad and doubtful debts-Rural Branch-Matter remitted to Assessing Officer. [S. 36(1)(vii)]