Sec. 36(1)(viia) Bank Bad Debt Deduction to Be Computed on Monthly Average Advances

State Bank of India Vs ACIT (ITAT Mumbai) A Special Bench of the Income Tax Appellate Tribunal (ITAT) Mumbai has ruled that deductions for provisions made 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, should be allowed on the total outstanding advances, including opening balances, and not merely on incremental advances made during the year. This decision, in the case of State Bank of India Vs. ACIT, resolves a conflict among ITAT benches and aligns with judgments from the Calcutta and Madras High Courts. The...