Case Law Details
ACIT Vs Abhyudaya Co-op Bank Limited (ITAT Mumbai)
The ITAT Mumbai has ruled in favor of Abhyudaya Co-op Bank Limited in an appeal filed by the Revenue. The case involved the allowance of bad debts declared as Non Performing Assets (NPS) before 01.04.2006 as a deduction under section 36(1)(vii) of the Income Tax Act for the assessment year 2012-13.
The Revenue challenged the deduction claimed by the assessee for bad debts under section 36(1)(vii), arguing that the provisions of section 36(1)(viia) should apply. However, the ITAT Mumbai relied on previous decisions, including the one in City Co-op Bank Ltd vs. ITO, to support the claim that bad debts written off for which a provision was created before 01.04.2006 are eligible for deduction under section 36(1)(vii) if certain conditions are met.
In conclusion, the ITAT Mumbai upheld the deduction claimed by Abhyudaya Co-op Bank Limited for bad debts declared as NPS before 01.04.2006, allowing it as a deduction under section 36(1)(vii) of the Income Tax Act for the assessment year 2012-13. The decision reaffirms the eligibility criteria for such deductions and provides clarity on the treatment of bad debts for co-operative banks.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
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