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“Section 36(1)(vii)”

Section References (mined)Section 36Section 36(1)(vii)853 judgments

The decision most relied on for Section 36(1)(vii) is TRF Ltd. v. CIT (323 ITR 397), cited in 714 judgments on BharatTax.

Leading authorities on Section 36(1)(vii)

TRF Ltd. v. CIT
323 ITR 397 · 2010 · Supreme Court
714
citing judgments

For claiming deduction for bad debts under section 36(1)(vii) of the Income Tax Act, it is sufficient for the assessee to write off the debt as irrecoverable in its accounts, and it is not necessary to prove that the debt has actually become irrecoverable.

Maxopp Investment Ltd. v. CIT
347 ITR 272 · 2012 · High Court
516
citing judgments

Disallowance under Section 14A cannot exceed the exempt income earned. The Assessing Officer must record satisfaction regarding the assessee's accounts before making any disallowance.

South Indian Bank Ltd. v. CIT
438 ITR 1 · 2021 · Supreme Court
508
citing judgments

The mixed fund theory is affirmed, holding that no disallowance of interest expenditure under Section 14A can be made if the assessee possesses sufficient non-interest bearing funds, such as capital and reserves, to cover investments made in tax-free securities.

Vijaya Bank v. CIT
323 ITR 166 · 2010 · Supreme Court
392
citing judgments

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.

Southern Technologies Ltd. v. JCIT
320 ITR 577 · 2010 · Supreme Court
353
citing judgments

The case concerns the allowability of deductions for provisions made under Section 36 of the Income Tax Act, 1961, especially those related to bad and doubtful debts. It distinguishes such deductions from the recognition of interest income on non-performing assets (NPAs).

Calcutta Co. Ltd. v. CIT
37 ITR 1 · 1959 · Supreme Court
341
citing judgments

When following the mercantile system of accounting, provisions for liabilities made on a scientific and rational basis are allowable as deductions, even if their actual quantification and discharge are deferred to a future date.

Catholic Syrian Bank Ltd. v. CIT
343 ITR 270 · 2012 · Supreme Court
326
citing judgments

For a bad debt deduction under Section 36(1)(vii), the debt must be actually written off as irrecoverable in the assessee's accounts, distinct from merely making a provision for bad and doubtful debts. The assessee bears the onus to satisfy the conditions under both Section 36(1)(vii) and Section 36(2) of the Income-tax Act.

United Commercial Bank v. CIT
240 ITR 355 · 1999 · Supreme Court
314
citing judgments

Liabilities accrued on a notional basis are allowable as deductions under the mercantile system of accounting even if their exact quantification or discharge is deferred to a future date or if the demand itself is disputed.

Judgments citing Section 36(1)(vii)

Addl CIT RG 10(1), Mumbai vs. Infrastructure Leasing & Financial Services Ltd, Mumbai

In the result, the appeal of the Revenue is dismissed

ITA 2841/MUM/2011[2005-06]Status: DisposedITAT Mumbai27 Jul 2022AY 2005-06

Bench: Shri Amarjit Singh & Ms. Kavitha Rajagopalassessment Years: 2005-06 Asst. Commissioner Of Income M/S. Infrastructure Leasing & Tax, Financial Services Ltd., Range – 10(1), The Il & Fs Financial Centre, Room No.455, Vs. Plot No.C-22, G Block, Aayakar Bhavan, Bandra Kurla Complex, Mk Road, Bandra (E), Mumbai – 400 020 Mumbai – 400 051 Pan: Aaaci 0989F (Appellant) (Respondent) Present For: Assessee By : None Revenue By : Shri Dharm Veer Singh, D.R. Date Of Hearing : 18 . 07 . 2022 Date Of Pronouncement : 27. 07 . 2022 O R D E R Per Amarjit Singh: The Appeal Of The Revenue For Assessment Year 2005-06 Vide Ita No.2841/M/2011 Was Adjudicated On 30.04.2019. Subsequently, The Revenue Has Filed Miscellaneous Application Stating That While Adjudicating The Aforesaid Appeal Ground No.2, Ground No.9 & Ground No.10 Pertaining To Disallowance Of Bad Debt, Claim Of Deduction Under Section 36(1)(Vii) Of The Act & Disallowance Out Of Travelling & Conveyance Expenses Were Not Adjudicated. Therefore The Appeal Of The Revenue Was Recalled By Ma No.571/M/2019 Order Dated 20.01.2020 To Adjudicate The Aforesaid Three Grounds Of The Revenue. The Relevant Facts Pertaining To These Three Grounds Of Appeal Are Discussed While Adjudicating The Same As Under:

For Appellant: NoneFor Respondent: Shri Dharm Veer Singh, D.R
Section 36(1)(vii)Section 36(1)(viii)

stating that while adjudicating the aforesaid appeal ground No.2, ground No.9 & ground No.10 pertaining to disallowance of bad debt, claim of deduction under section 36(1)(vii) of the Act and disallowance out of travelling and conveyance expenses were not adjudicated. Therefore the appeal of the Revenue was recalled ... along with the amounts outstanding which were written off were submitted by the assessee. It was also explained that condition as stipulated in section 36(1)(vii) were fully satisfied. The loans had become bad and the same had been written off. The assessee has also enclosed the copies

Tata Chemicals Ltd, Mumbai vs. DCIT 2(2), Mumbai

In the result, appeal by the Revenue is dismissed

ITA 2692/MUM/2012[2005-06]Status: DisposedITAT Mumbai06 Jul 2022AY 2005-06

Bench: Shri Pramod Kumar & Shri Sandeep Singh Karhail

For Appellant: Shri Nitesh Joshi a/wFor Respondent: Smt. Somogyan Pal, CIT DR
Section 115JSection 14ASection 250Section 80Section 80HSection 80M

written off in the Appellant‘s accounts ought to be allowed as a deduction for bad and doubtful debts under section 36(1)(vii) of the Act.‖ Tata Chemicals Ltd. A.Y. 2004–05 & 2005–06 31. During the course of hearing, the aforesaid additional ground was not pressed ... written off in the Appellant‘s accounts ought to be allowed as a deduction for bad and doubtful debts under section 36(1)(vii) of the Act. 44. During the course of hearing, the aforesaid additional ground was not pressed by the learned counsel. Accordingly, the same is dismissed

DCIT 2(2), Mumbai vs. Tata Chemicals Ltd, Mumbai

In the result, appeal by the Revenue is dismissed

ITA 2553/MUM/2012[2005-06]Status: DisposedITAT Mumbai06 Jul 2022AY 2005-06

Bench: Shri Pramod Kumar & Shri Sandeep Singh Karhail

For Appellant: Shri Nitesh Joshi a/wFor Respondent: Smt. Somogyan Pal, CIT DR
Section 115JSection 14ASection 250Section 80Section 80HSection 80M

written off in the Appellant‘s accounts ought to be allowed as a deduction for bad and doubtful debts under section 36(1)(vii) of the Act.‖ Tata Chemicals Ltd. A.Y. 2004–05 & 2005–06 31. During the course of hearing, the aforesaid additional ground was not pressed ... written off in the Appellant‘s accounts ought to be allowed as a deduction for bad and doubtful debts under section 36(1)(vii) of the Act. 44. During the course of hearing, the aforesaid additional ground was not pressed by the learned counsel. Accordingly, the same is dismissed

DCIT 2(2), Mumbai vs. Tata Chemicals Ltd, Mumbai

In the result, appeal by the Revenue is dismissed

ITA 2733/MUM/2011[2004-05]Status: DisposedITAT Mumbai06 Jul 2022AY 2004-05

Bench: Shri Pramod Kumar & Shri Sandeep Singh Karhail

For Appellant: Shri Nitesh Joshi a/wFor Respondent: Smt. Somogyan Pal, CIT DR
Section 115JSection 14ASection 250Section 80Section 80HSection 80M

written off in the Appellant‘s accounts ought to be allowed as a deduction for bad and doubtful debts under section 36(1)(vii) of the Act.‖ Tata Chemicals Ltd. A.Y. 2004–05 & 2005–06 31. During the course of hearing, the aforesaid additional ground was not pressed ... written off in the Appellant‘s accounts ought to be allowed as a deduction for bad and doubtful debts under section 36(1)(vii) of the Act. 44. During the course of hearing, the aforesaid additional ground was not pressed by the learned counsel. Accordingly, the same is dismissed

Tata Chemicals Ltd, Mumbai vs. DCIT 2(3), Mumbai

In the result, appeal by the Revenue is dismissed

ITA 2440/MUM/2011[2004-05]Status: DisposedITAT Mumbai06 Jul 2022AY 2004-05

Bench: Shri Pramod Kumar & Shri Sandeep Singh Karhail

For Appellant: Shri Nitesh Joshi a/wFor Respondent: Smt. Somogyan Pal, CIT DR
Section 115JSection 14ASection 250Section 80Section 80HSection 80M

written off in the Appellant‘s accounts ought to be allowed as a deduction for bad and doubtful debts under section 36(1)(vii) of the Act.‖ Tata Chemicals Ltd. A.Y. 2004–05 & 2005–06 31. During the course of hearing, the aforesaid additional ground was not pressed ... written off in the Appellant‘s accounts ought to be allowed as a deduction for bad and doubtful debts under section 36(1)(vii) of the Act. 44. During the course of hearing, the aforesaid additional ground was not pressed by the learned counsel. Accordingly, the same is dismissed

DCIT 1(1)(2), Mumbai vs. Forbes & Company Ltd, Mumbai

In the result, appeal filed by the Revenue is treated as partly allowed

ITA 3873/MUM/2017[2011-12]Status: DisposedITAT Mumbai01 Jul 2022AY 2011-12

Bench: Learned Cit(A) & Which Was Partly Allowed.

Section 143(3)Section 14ASection 36(1)(iii)

However, the Assessing Officer disallowed the claim observing that the assessee has not furnished any proof regarding its liability as per provisions of section 36(1)(vii) read with section 36(2) of the Act. The Learned CIT(A) deleted the disallowance by following its decision rendered for Asst. Years

Abhyudaya Co-Op Bank Ltd., Mumbai vs. Pr. CIT-1, Mumbai

In the result, appeal filed by the assessee is allowed

ITA 1595/MUM/2020[2010-11]Status: DisposedITAT Mumbai28 Jun 2022AY 2010-11

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Bleabhyudaya Co-Op Bank Limited V. Pr.Cit -1 Ground Floor, K.K. Tower 3Rd Floor, Room No. 330 Abhudaya Bank Lane Aayakar Bhavan Off. G.D. Ambedkar Marg M.K. Road Parel Village, Mumbai – 400012 Mumbai - 400020 Pan: Aaaaa0300L (Appellant) (Respondent) Assessee By : Shri Keshav Bhujle Department By : Smt. Shailja Rai

For Appellant: Shri Keshav BhujleFor Respondent: Smt. Shailja Rai
Section 263Section 36(1)(vii)

section (4) in section 80P the assessee was not entitled for deduction under section 80P from A.Y. 2007-08. The deduction under section 36(1)(vii) is available in respect of bad debts written off subject to the fulfilment of the conditions specified under section 36(2). Section 36(1 ... amount not exceeding 10% of the aggregate average advances made by the rural branches of such banks. The provisions of Section 36(1)(vii) and section 36(1)(viia) are distinct and independent. The provisions of Section 36(1)(viia) are applicable w.e.f. A.Y. 2007-08 to cooperative bank also

Axis Cades Aerospace Infrastructure Private Limited, Bangalore vs. Principal Commissioner of Income Tax Bangalore-1, Bangalore

In the result, the appeal by the assessee is dismissed

ITA 777/BANG/2017[2012-13]Status: DisposedITAT Bangalore27 Jun 2022AY 2012-13

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy Sassessment Year : 2012-13

For Appellant: Shri Sheetal Borkar, AdvocateFor Respondent: Shri Praveen Karanth, CIT(DR)(ITAT), Bengaluru
Section 143(2)Section 263Section 36(1)(vii)

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESEIDENT AND SHRI PADMAVATHY S, ACCOUNTANT

ACIT - 2(3)(1), Mumbai vs. Lord Krishna Bank Ltd. (No Merged With Hdfc Bank Ltd.), Mumbai

In the result, the appeal of the revenue is dismissed

ITA 6186/MUM/2016[2002-03]Status: DisposedITAT Mumbai24 Jun 2022AY 2002-03
For Appellant: Shri Yogesh Thar/Chaitanya JoshiFor Respondent: Shri Ashish Deharia (Sr. AR)
Section 143(3)Section 147Section 148Section 2Section 36(1)(vii)Section 36(1)(viia)

vii) to the tune of Rs.11.37 crores as restricted to the amount in excess of Rs.6.05 crores in accordance with the proviso to section 36(1)(vii). Therefore, the claims allowed u/s 36(1)(vii) was Rs.5.31 crores. While doing so, the limitation set by the statute. i.e. ‘limiting ... However, since the entire provision written back in relation to the debts written off are reduced from the debts under the proviso to Section 36(1)(vii) of the Act and the deduction allowed as bad debt under that section is the net of the opening credit balance

Future Polyesters Ltd, Mumbai vs. ACIT 5 (1)(2), Mumbai

In the result, the appeals of the assessee for AY 2011-12 and 2014-15

ITA 7557/MUM/2019[2014-15]Status: DisposedITAT Mumbai21 Jun 2022AY 2014-15
Section 14A

THE INCOME TAX APPELLATE TRIBUNAL “F” Bench, Mumbai Shri B.R. Baskaran (AM) & Shri Kuldip Singh (JM) I.T.A. No. 7023/Mum/2019 (A.Y

Futura Polyesters Ltd., Mumbai vs. CIT 5 (1) (2), Mumbai

In the result, the appeals of the assessee for AY 2011-12 and 2014-15

ITA 7024/MUM/2019[2012-13]Status: DisposedITAT Mumbai21 Jun 2022AY 2012-13
Section 14A

THE INCOME TAX APPELLATE TRIBUNAL “F” Bench, Mumbai Shri B.R. Baskaran (AM) & Shri Kuldip Singh (JM) I.T.A. No. 7023/Mum/2019 (A.Y

Futura Polyesters Ltd., Mumbai vs. CIT 5 (1), Mumbai

In the result, the appeals of the assessee for AY 2011-12 and 2014-15

ITA 7023/MUM/2019[2011-12]Status: DisposedITAT Mumbai21 Jun 2022AY 2011-12
Section 14A

THE INCOME TAX APPELLATE TRIBUNAL “F” Bench, Mumbai Shri B.R. Baskaran (AM) & Shri Kuldip Singh (JM) I.T.A. No. 7023/Mum/2019 (A.Y

Ibm India Private Limited, Bengaluru vs. Assistant Commissioner of Income Tax, Circle- 3(1)(1), Bengaluru

In the result the appeal filed by the assessee stands partly allowed for statistical purposes

ITA 584/BANG/2020[2006-07]Status: DisposedITAT Bangalore13 Jun 2022AY 2006-07
For Appellant: Shri Ajay Rotti, CA
Section 143(3)Section 147Section 250Section 29Section 36(1)(vii)Section 50B

treating the write off of loans and advances provided to employees (which subsequently become irrecoverable) as write off of debts receivable under section 36(1)(vii). 5.2. Without prejudice to the above, the learned CIT(A) has erred in law and on facts by not treating the same

Eat India Pvt Ltd., Mumbai vs. ITO 4(1)(4), Mumbai

In the result, the appeal of the assessee is allowed

ITA 915/MUM/2020[2015-16]Status: DisposedITAT Mumbai08 Jun 2022AY 2015-16

Bench: Shri M Balaganesh, Am & Shri Pavan Kumar Gadale, Jm The Cit (A) -9 Eat India Private Limited 6Th Floor, Aayakar Bhavan, 2, Silk House, Silk Bazar, M.K. Road, 630, Jss Road, Vs. Mumbai-400 002 Mumbai-400 020 (Respondent) (Appellant) Pan No. Aaace1868M Assessee By : Shri Jigar Mehta, Ar Revenue By : Shri S.G. Mehta, Dr Date Of Hearing: 31.05.2022 Date Of Pronouncement : 08.06.2022

For Appellant: Shri Jigar Mehta, ARFor Respondent: Shri S.G. Mehta, DR
Section 143(3)Section 194CSection 36(2)

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI M BALAGANESH, AM AND SHRI PAVAN KUMAR GADALE, JM

Mr.Santosh S Lad, Bangalore vs. The Deputy Commissioner of Income Tax Central Circle-2(3), Bangalore

In the result, the appeal filed by the assessee is dismissed

ITA 1298/BANG/2018[2013-14]Status: DisposedITAT Bangalore06 Jun 2022AY 2013-14

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2013-14

For Appellant: Shri Narendra Sharma, A.RFor Respondent: Smt. Priyadarshini Basaganni, D.R

mean that the assessee not complied with ITA No.1298 /Bang/2018 Mr. Santosh S. Lad, Bangalore Page 4 of 9 the provisions of section 36(1)(vii) r.w.s. 36(2) of the Act, so as to claim it as bad debts. Against this assessee went in appeal before ... loss so as to claim the same as business expenditure. In our opinion, the assessee has not satisfied the condition laid down in section 36(1)(vii) r.w.s. 36(2) of the Act. As per section 36(2) of the Act, deduction shall not be allowed unless such debt

The Karnataka Bank Ltd, Mangaluru vs. Deputy Commissioner of Income Tax, Circle-2(1), Mangaluru

In the result, the appeal filed by the Revenue is dismissed and the appeal of the assessee is partly allowed

ITA 1907/BANG/2018[2014-15]Status: DisposedITAT Bangalore26 May 2022AY 2014-15

Bench: Shri N.V. Vasudevan & Shri B.R. Baskaranthe Karnataka Bank Ltd. Dcit, Circle - 2(1) Head Office, Mahaveera Circle Mangalore Vs. Kankanady Mangalore 575002 Pan – Aabct5589K Appellant Respondent Dcit, Circle – 2(1) The Karnataka Bank Ltd. Mangalore Head Office, Mahaveera Circle Vs. Kankanady Mangalore 575002 Pan – Aabct5589K Appellant Respondent Assessee By: Shri S. Ananthan, Ca & Smt. Lalitha Rameswaran, Ca Revenue By: Shri Mudavathu Harish Chandra Naik, Ca Date Of Hearing: 22.03.2022 Date Of Pronouncement: 26.05.2022 O R D E R Per: B.R. Baskaran, A.M. These Cross Appeals Are Directed Against The Order Dated 27-03-2018 Passed By Ld Cit(A), Mangaluru & They Relate To The Assessment Year 2014-15. 2. The Assessee Is A Banking Company Carrying On Banking Business. The Karnataka Bank Ltd.

For Appellant: Shri S. Ananthan, CA &For Respondent: Shri Mudavathu Harish
Section 14A

authorities as well as other materials on record. Before going into the issue, it is necessary to look into the relevant statutory provisions. Section 36(1)(vii) provides for deduction on account of bad debts actually written off in the books of account. However, proviso to 36(1)(vii) makes ... double deduction. In our view, both AO as well as ld. CIT(A) have committed fundamental error by mixing up provisions of sections 36(1)(vii) and 36(1)(viia). While 36(1)(vii) speaks of actual write off of bad debts in the books of account, section 36(1

M/S Siddaganga Urban Co-Operative Bank Ltd, Tumkur vs. Assistant Commissioner of Income Tax Circle-1, Tumkur

In the result, we do not find any merit in this appeal, the same fails and is hereby dismissed

ITA 93/BANG/2018[2012-13]Status: DisposedITAT Bangalore25 May 2022AY 2012-13
For Respondent: Shri S.V. Ravishankar
Section 143Section 37

actual write off is in excess of provision made under Section 36(1)(viia) of the Act, then as per proviso to Section 36(1)(vii), actual write off in excess of provision of Section 36(1)(viia) would alone be allowed under Section 36(1)(vii). It is also ... argued that allowing the provision under Section 36(1)(viia) of the Act and on actual write off under Section 36(1)(vii) of the Act would amount to double deduction and the same is in contravention of the law laid down by the Supreme Court in CATHOLIC SYRIAN BANK

Indianoil Skytanking Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle- 3(1)(1), Bengaluru

In the result, the appeals are partly allowed

ITA 407/BANG/2020[2017-18]Status: DisposedITAT Bangalore20 May 2022AY 2017-18

Bench: Shri George George K. & Ms. Padmavathy S

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru
Section 115Section 143(3)Section 36(1)(iii)Section 37(1)Section 80Section 80I

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND Ms. PADMAVATHY S

M/S. Indianoil Skytaking Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle- 3(1)(1), Bangalore

In the result, the appeals are partly allowed

ITA 299/BANG/2020[2016-17]Status: DisposedITAT Bangalore20 May 2022AY 2016-17

Bench: Shri George George K. & Ms. Padmavathy S

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri Sumer Singh Meena, CIT(DR)(ITAT), Bengaluru
Section 115Section 143(3)Section 36(1)(iii)Section 37(1)Section 80Section 80I

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND Ms. PADMAVATHY S

Additional Commissioner of Income Tax (Ltu), Bangalore vs. M/S Texas Instruments (India) Private Limited, Bangalore

In the result, appeal by the Revenue is dismissed

ITA 606/BANG/2019[2014-15]Status: DisposedITAT Bangalore17 May 2022AY 2014-15

Bench: Shri N. V. Vasudevan & Ms. Padmavathy Sappeal Nos. & Appellant Respondent Assessment Year Acit (Ltu)

For Appellant: Shri. Sharath Rao, CAFor Respondent: Mrs. Susan D. George, CIT (DR) (ITAT), Bengaluru

from capital to revenue. The AO held that there is no provision under income tax act to claim the advances written off. Under Section 36(1)(vii) r.w.s 36(2), only bad debts can be written off as irrecoverable and can be claimed as expenditure. The advances do not qualify ... deductible expenditure in computing income from business. The claim was examined by the Revenue authorities in the light of the provisions of section 36(1)(vii) of the Act as bad debts written of which was rightly rejected by the Revenue authorities. The deduction was also examined under section