DBS BANK LTD (DBS BANK LTD., INDIA BRANCHES NOW CONVERTED INTO DBS BANK INDIA LTD),MUMBAI vs. DCIT (INT TXT)-2(1)(2), MUMBAI

ITA 3691/MUM/2023Status: DisposedITAT Mumbai21 November 2024AY 2015-16Bench: SHRI NARENDRA KUMAR BILLAIYA, HON'BLE (Accountant Member), SHRI SUNIL KUMAR SINGH, HON'BLE (Judicial Member)1 pages
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What did the Tribunal hold?

The Tribunal held that the loss on sale of NPA, even if debited as bad debt due to RBI norms, is not a bad debt deductible under Section 36(1)(vii) of the Income Tax Act. The Tribunal dismissed the revenue's appeal regarding interest paid to the Head Office.

What were the facts?

The assessee, DBS Bank Ltd. India branches, claimed a deduction for bad debts written off amounting to Rs. 427,46,46,000. The Assessing Officer (AO) disallowed this claim, viewing it as a loss on sale of Non-Performing Assets (NPAs) rather than a bad debt. The CIT(A) upheld the AO's decision.

What were the issues?

Whether the loss on sale of NPAs can be claimed as a deduction for bad debts under Section 36(1)(vii) of the Income Tax Act. Whether interest paid by an Indian PE of a foreign bank to its Head Office is deductible.

Which sections of the Income-tax Act were involved?

Section 36(1)(vii),Section 37(1),Section 28,Section 14A

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Income Tax Appellate Tribunal, “I” BENCH, MUMBAI

Before: SHRI NARENDRA KUMAR BILLAIYA, HON’BLE & SHRI SUNIL KUMAR SINGH, HON’BLE

For Appellant: Shri P.J. Pardiwala/Shri Madhur Agarwal, A/Rs
Hearing: 11/11/2024Pronounced: 21/11/2024

Heard together (2 matters)

I.T.A. No. 3691/Mum/2023
I.T.A. No. 4722/Mum/2023

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PER NARENDRA KUMAR BILLAIYA, AM: I.T.A. No. 3691/Mum/2023 & I.T.A. No. 4722/Mum/2023, are cross-appeals by the assessee and the revenue preferred against t

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