Law: Auction Rules, 1996

Section:

Section 36(1)(vii) of the Income-tax Act, 1961 - Bad debts - Assessment year 1995-96 - Deduction of bad and doubtful debts as claimed under section 36(1)(vii) is to be reduced to the extent provision for bad and doubtful debts has been made under section 36(1)(viia) [In favour of revenue] The assessee was engaged in development of industrial estates and infrastructural facilities. It had created a provision for bad and doubtful debts under section 36(1)(viia) amounting to Rs. 19,77,535. Besides this, the assessee also claimed bad debts of Rs. 1.10 crore under section 36(1)(vii). The Assessing Officer disallowed provision made under section 36(1)(viia) and thereby reduced deduction of bad debts available to the assessee under section 36(1)(vii). The Tribunal held that the sum which was shown as provision during the year had to be disallowed in view of the proviso to section 36(1)(vii). Held that the finding of the Tribunal was in conformity with the proviso to section 36(1)(vii) and section 36(2)(v) and, therefore, no interference was needed by the Court. JUDGMENT Ajay Kumar Mittal, J. - This appeal under section 260A of the Income-tax Act, 1961 (for short the Act), has been filed by the assessee against the order dated August 20, 2003, passed by the Income-tax Appellate Tribunal, Chandigarh Bench (B), Chandigarh (in short the Tribunal), in I.T.A. No. 316/Chandi/98 relating to the assessment year 1995-96. 2. The assessee has claimed the following questions for determination by this court : (a) Whether, under the facts and circumstances of the case and on the true and correct interpretation of the provisions of section 36(1)(vii), 36(1)(viia), the Tribunal is justified in upholding the disallowance of deduction of Rs. 19,77,535 whereas both the sections are separate, distinct and operate independently ? (b) Whether, under the facts and circumstances of the case, the Tribunal is justified in upholding the disallowance of deduction of Rs. 19,77,535 whereby when there is no judgment against the assessee the view favouring on the basis of true and correct interpretation of the provisions of law, objects of introduction of the section, circulars of the Central Board…

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