Case Law Details
Induslnd Bank Ltd. Vs ACIT (ITAT Mumbai)
ITAT Mumbai held that bad debts arising from credit card business would be part and parcel of loss arising in the course of banking business and hence liable as deduction u/s.36(1)(vii) of the Income Tax Act.
Facts-
The assessee had been deriving huge income of Rs.152.32 crores from its total credit card business of Rs.2030 Crores. Out of the said business, Rs.8.34 Crores had turned bad which the assessee had claimed as bad debts u/s.36(1)(vii) of the Income Tax Act. AO disallowed the bad debts of Rs. 8,33,73,611/- alleging that credit card business was not banking business of the assessee.
CIT(A) confirmed the disallowance on the ground that bad debts claimed by the assessee is not routed through or debited to the provisions for bad and doubtful debts account. Instead the said bad debts has been directly claimed u/s.36(1)(vii) of the Act. Accordingly, he confirmed the disallowance of bad debts claimed by the assessee.
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