Andhra Pradesh State Cooperative Bank Limited Vs ACIT (ITAT Hyderabad)
ITAT Hyderabad held that deduction u/s. 36(1)(viia) of the Income Tax Act is not allowable in absence of any provision for bad and doubtful debts in the books of account.
Facts- The assessee is a Scheduled State Cooperative Bank for the State of Andhra Pradesh. The assessee filed its return of income for the AY 2009-10 on 30.09.2009 admitting a total income of Rs. 62,19,22,600/- . Subsequently, assessee filed a revised return of income on 30.03.2011, declaring a net loss of Rs.18,04,47,434/-.
The assessment was completed by Ld. AO u/s.143(3) of the Income Tax Act, 1961 determining total income at Rs.2,78,46,98,694/-. CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed by the appellant.
Notably, while preferring the present appeal, the appellant has raised additional ground with regard to the share of APCOB in the debts irrecoverable by PACS, followed by DCCBS, are debts written off and eligible for deduction u/s. 36(1)(vii).
Conclusion- Held that it is abundantly clear that, for the purpose of invoking the provisions of section 36 (1) (viia), it is essential for the assessee bank to make a provision in the books of account for bad and doubtful debts. Admittedly the assessee has not made any provision for bad and doubtful debts in its books of account, therefore in our considered opinion the assessee is not entitled to benefits of section 36 (1) (viia) of the Act.
