“Section 32(1)(viia)”
The decision most relied on for Section 32(1)(viia) is Vijaya Bank v. CIT (323 ITR 166), cited in 392 judgments on BharatTax.
Leading authorities on Section 32(1)(viia)
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.
Depreciation is allowable on assets that are kept "ready for use," not just those in "actual use." This interpretation applies to the term "use" in Section 32 of the Income Tax Act.
Unpaid interest on loans where principal/interest remained unpaid for 90 days, classified as non-accrual loans, when reversed to a Reserve for Doubtful Interest (RFDI) account, and subsequent interest accruals credited to RFDI instead of the profit and loss account, is taxable on a net basis of accruals less recoveries.
Provisions made against standard assets cannot be considered as provisions for bad and doubtful debts for the purpose of deduction under Section 36(1)(viia).
