Cumulative Monthly Advances, Not Incremental Figures, Govern Section 36(1)(viia) Deduction

CIT Vs Madurai District Central Co-operative Bank Limited (Madras High Court) The Madras High Court considered departmental appeals relating to Assessment Year 2010–11 concerning the computation of deduction for provision for bad and doubtful debts under Section 36(1)(viia) of the Income-tax Act, 1961, read with Rule 6ABA of the Income-tax Rules, 1962. Two substantial questions of law were admitted: whether “aggregate average advances” of rural branches should be computed based on the amounts outstanding at the end of the last day of each month of the previous year, and whether such comp...