“Section 36(1)(iia)”
The decision most relied on for Section 36(1)(iia) is Vijaya Bank v. CIT (323 ITR 166), cited in 392 judgments on BharatTax.
Leading authorities on Section 36(1)(iia)
A provision for bad and doubtful debts debited to the profit and loss account and reduced from advances on the balance sheet constitutes a write-off for deduction purposes. This is true even if individual debtor accounts are not closed.
A provision for doubtful debts cannot be added back while computing book profits under Section 115JB of the Income-tax Act for Minimum Alternate Tax (MAT) purposes.
Interest paid on money borrowed for acquiring machinery is deductible under Section 36(1)(iii) even if the machinery is not put to use in the year of borrowing. This principle applies to the 'for the purpose of business' test for borrowed capital.
The Supreme Court has held that the Tax Recovery Officer has the power to issue a prohibitory order under Section 222 of the Income Tax Act, 1961, even before the demand becomes final. This power is available when there is a certificate of arrears.
