IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE THE ACTING CHIEF JUSTICE MR.P.R.RAMAN & THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR THURSDAY, THE 11TH MARCH 2010 / 20TH PHALGUNA 1931 ITA.No. 70 of 2010() -------------------- ITA.836/COCH/2007 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENT ---------------------------------------- THE COMMISSIONER OF INCOME TAX, TRIVANDRUM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/APPELLANT: --------------- THE KERALA FINANCIAL CORPORATION, TRIVANDRUM. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 11/03/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R.RAMAN, AG. C.J. & C.N.RAMACHANDRAN NAIR, J. .................................................................... I.T. Appeal No.70 of 2010 .................................................................... Dated this the 11th day of March, 2010. JUDGMENT Ramachandran Nair, J. Question raised is whether the Tribunal was justified in holding that the assessee is entitled to deduction of bad debt actually written off even if the assessee has not debited the same in the provision created for bad and doubtful debts. We have heard Standing Counsel appearing for the appellant. 2. The clear finding of the Tribunal is that what is claimed as deduction is bad debt actually written off which is an allowable deduction under Section 36(1)(vii) of the Income Tax Act. However, department's case is that bad debt written off is not debited to the provision created for bad and doubtful debts and so much so, the assessee is not entitled to claim deduction under Section 36(1)(viia). The Tribunal rightly found that the provision created by the assessee is not claimed as a deduction and so much so, there is no requirement to debit the actual debt written off in the provision created for bad and 2 doubtful debts. We are in complete agreement with the finding of the Tribunal because the department's apprehension that assessee would have claimed deduction of both provision as well as actual debt written off does not arise here. However, if provision created is debited to Profit and Loss Account and the said provision is also claimed as a deduction and allowed, then the department's stand certainly is correct. However, in view of the factual finding by the Tribunal that provision is neither claimed nor allowed as a deduction, we do not find any merit in the appeal. Consequently the same is dismissed. However, if there is any factual error in the finding of fact by the Tribunal, it is for the department to ask for rectification before the Tribunal. P.R.RAMAN Acting Chief Justice C.N.RAMACHANDRAN NAIR Judge pms