Bank’s Claim for non- rural bad debt write off u/s 36(1)(vii) was allowable without adjusted against provisions for bad and doubtful debts.

Karnataka Bank Ltd Vs DCIT (ITAT Bangalore)

Conclusion: Section 36(1)(vii) of ITA applied separately to non-rural debts, while Section 36(1)(viia) of the tax statute only applied to rural debts, making it clear that banks were entitled to claim both deductions, provided they pertained to different types of advances. Only rural advances were subject to the proviso under Section 36(1)(viia) of tax statute, and non-rural bad debts could be claimed as a deduction without being adjusted against provisions for bad and doubtful debts.

Held: Assesse

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