| |
| The Tax Publishers2020 TaxPub(DT) 2501 (Kol-Trib) INCOME TAX ACT, 1961
Section 36(1)(viia)
Where provision for NPA made by NBFC in terms of RBI directions same did not constitute expense for purposes of section 36(1)(viia), the same would not be allowable.
|
Business deduction under section 36(1)(viia) - Bad debts - Allowability - Provision for non-performing assets (NPA) made in accordance with prudential norms of RBI
Assessee-NBFC claimed deduction of provision for non-performing assets (NPA) made in accordance with prudential norms of RBI. AO was of the view that no NBFC would be eligible to get deduction under section 36(1)(viia), irrespective of the fact that the provision was made over NPA following RBI guideline. He further alleged that no provision on unascertained liability could be allowed as a legitimate deduction. Held: Since provision for NPA made by assessee-NBFC in terms of RBI directions did not constitute expense for purposes of section 36(1)(viia), the said provision would not be allowable. Further, the deduction could not be claimed under section 37(1) also. Accordingly, provision for NPA made in accordance with prudential norms of RBI could not be allowed as deduction.
Followed:SREI Infrastructure Finance Ltd. v. Addl. CIT [ITA Nos. 1318 & 1302/Del/2012 & 1812&2003/Kol/2016 for assessment year 2008-09 & 2011-12, dated 31-12-2019] : 2020 TaxPub(DT) 0429 (Kol-Trib)
REFERRED :
FAVOUR : Against the assessee
A.Y. : 2002-03
IN THE ITAT, KOLKATA BENCH
 SUBSCRIBE FOR FULL CONTENT
|