Disallowed the IT Appeal against the Tribunal's order. Held that reassessment under Section 147 was valid as the provision was not allowable. Financial Institutions cannot claim bad debt provision; admissible deduction is permitted only on actual bad debts written off.
Partnership ITA No. 48 of 2010 is dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE C.N.RAMACHANDRAN NAIR
&
THE HON'BLE MR. JUSTICE BABU MATHEW P.JOSEPH
MONDAY, THE 12TH DAY OF MARCH 2012/22ND PHALGUNA 1933
ITA.No. 48 of 2010 ( )
AGAINST ORDER IN ITA.286/2004 of I.T.A.TRIBUNAL,COCHIN BENCH
APPELLANT(S)/RESPONDENT IN ITA NO.286/C/2004:
KERALA FINANCIAL CORPORATION, REPRESENTED BY MANAGING DIRECTOR,VELLAYAMBALAM TRIVANDRUM.
BY ADVS.SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS
SRI.P.GOPINATH MENON SMT.PREETHA S.NAIR
RESPONDENT(S)/APPELALNT IN ITA NO.286/C/2004:
THE ASSISTANT COMMISSIONER
OF INCOME TAX, CIRCLE-1(1),TRIVANDRUM.
BY SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES)
BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX
THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 12-032012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
ITA NO.48/2010
APPENDIX
APPELLANT'S EXHIBITS
ANNEXURE-A : COPY OF ASSESSMENT ORDER DATED 26/02/2002. ANNEXURE-B : COPY OF ORDER OF THE CIT (APPEALS) DATED 03/12/2003. ANNEXURE-C : COPY OF ORDER OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH DATED 17/11/2006.
//TRUE COPY//
PA TO JUDGE.
jg
C.N.RAMACHANDRAN NAIR & BABU MATHEW P. JOSEPH, JJ.
I.T.A.No.48 of 2010
Dated this the 12th day of March, 2012.
J U D G M E N T
Ramachandran Nair, J.
The question raised is only with regard to the validity of reassessment completed under Section 147 to disallow provision for bad debts. On merits, the appellant has no dispute that the provision is not allowable. Further, whatever is the bad debt claimed and disallowed, it can be claimed as and when the provision now created becomes real bad debt.
ITA No.48/2010
-2-
and no Financial Institution like the appellant is entitled to
claim the provision and admissible deduction is on actual bad debt written off.
Therefore, we do not find any merit in the I.T.A and the same is accordingly dismissed.
(C.N.RAMACHANDRAN NAIR, JUDGE)
(BABU MATHEW P. JOSEPH, JUDGE)
jg
2 issues framed by the court
Whether the reassessment under Section 147 to disallow bad debt provision was valid.
Whether a Financial Institution is entitled to claim provision for bad debts like a Bank.
1 provisions across 1 enactments
Kerala Financial Corporation
Assistant Commissioner of Income Tax, Circle-1(1), Trivandrum
C.N.Ramachandran Nair
Babu Mathew P. Joseph
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
