Law:

Section:

I. Section 36(1)(vii) of the Income-tax Act, 1961 - Bad debts - Assessment year 1998-99 - Whether following order passed by Court in assessee's own case relating to assessment year 1999-2000, it was to be held that assessee was not entitled to deduction of provision made in respect of non-performing assets which were considered irrecoverable - Held, yes [In favour of revenue] II. Section 35D of the Income-tax Act, 1961 - Preliminary expenses - Assessment year 1998-99 - Whether following order passed by High Court in assessee's own case relating to assessment year 1999-2000, it was to be held that assessee was not entitled to amortization of preliminary expenses under section 35D towards share issue expenses - Held, yes [In favour of revenue] CASE REVIEW TVS Finance & Services Ltd. v. Joint CIT [2009] 318 ITR 435 (Mad.) and CIT v. Sakthi Finance Ltd. [2002] 256 ITR 488 (Mad.) followed & relied upon. CASES REFERRED TO T. N. Power Finance & Infrastructure Development Corpn. Ltd. v. Jt. CIT[2006] 153 Taxman 466/ 280 ITR 491 (Mad.) (para 2). K. Venkatanarayanan and Subbaraya Aiyar for the Respondent. JUDGMENT K. Raviraja Pandian, J. - The assessee on appeal against the order of the Income-tax Appellate Tribunal Madras "A" Bench passed in I. T. A. Nos. 2445/2446/(Mad.)/06 dated September 22, 2008 by formulating the following questions of law : "(1) Whether the Appellate Tribunal is right in law in holding that the appellant is not entitled to deduction of the provision made in respect of non-performing assets which are considered irrecoverable ? (2) Whether the Appellate Tribunal was justified in not appreciating that the provision made in respect of non-performing assets if not allowable as a bad debt is allowable as a business loss ? (3) Whether on the facts and in the circumstances of the case the Tribunal was right in holding that the appellant is not entitled to amortisation of preliminary expenses under section 35D towards share issue expenses ?" 2. The issue involved in these two appeals is one and the same. The facts relating to the assessment year 1998-99 are stated below for the disposal of the appeals : The assessee is engaged in the business…

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