Assessee was a rural regional bank engaged in business of banking which claimed deduction on account of provision for bad and doubtful debts under S. 36(1)(viia) of the Act. The AO rejected assessee’s claim on ground that assessee did not debit its profit and loss account any sum towards ‘provision for bad and doubtful debts’. CIT (A) allowed the claim . On appeal by revenue following the order of appellate Tribunal for earlier year , disallowance made by the AO is affirmed . (AY. 2012 -13, 2013 -14)
JCIT v. Karnataka Vikas Grameena Bank. (2020) 181 ITD 672 / 79 ITR 207 (Bang) (Trib.)
S. 36(1)(viia) :Bad debt-Provision for bad and doubtful debts – Schedule bank -Not debited to profit and loss account – Rejection of claim is held to be justified .