Ita/70/2010 Of The Commissioner Of Income Tax, Tvpm v. The Kerala Financial Corporation, Tvpm

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE ACTING CHIEF JUSTICE MR.P.R.RAMAN & THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR THURSDAY, THE 11TH MARCH 2010 / 20TH PHALGUNA 1931 ITA.No. 70 of 2010() -------------------- ITA.836/COCH/2007 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENT ---------------------------------------- THE COMMISSIONER OF INCOME TAX, TRIVANDRUM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/APPELLANT: --------------- THE KERALA FINANCIAL CORPORATION, TRIVANDRUM. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 11/03/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R.RAMAN, AG. C.J. &C.N.RAMACHANDRAN NAIR, J. ....................................................................I.T. Appeal No.70 of 2010 .................................................................... Dated this the 11th day of March, 2010. JUDGMENT Ramachandran Nair, J. Question raised is whether the Tribunal was justified in holdingthat the assessee is entitled to deduction of bad debt actually written offeven if the assessee has not debited the same in the provision createdfor bad and doubtful debts. We have heard Standing Counselappearing for the appellant. 2. The clear finding of the Tribunal is that what is claimed asdeduction is bad debt actually written off which is an allowablededuction under Section 36(1)(vii) of the Income Tax Act. However,department's case is that bad debt written off is not debited to theprovision created for bad and doubtful debts and so much so, theassessee is not entitled to claim deduction under Section 36(1)(viia).The Tribunal rightly found that the provision created by the assessee isnot claimed as a deduction and so much so, there is no requirement todebit the actual debt written off in the provision created for bad and doubtful debts. We are in complete agreement with the finding of theTribunal because the department's apprehension that assessee wouldhave claimed deduction of both provision as well as actual debt writtenoff does not arise here. However, if provision created is debited toProfit and Loss Account and the said provision is also claimed as adeduction and allowed, then the department's stand certainly is correct.However, in view of the factual finding by the Tribunal that provisionis neither claimed nor allowed as a deduction, we do not find any meritin the appeal. Consequently the same is dismissed. However, if thereis any factual error in the finding of fact by the Tribunal, it is for thedepartment to ask for rectification before the Tribunal. P.R.RAMANActing Chief Justice C.N.RAMACHANDRAN NAIRJudge pms