KERALA FINANCIAL CORPORATION REPRESENTED BY MANAGING DIRECTOR VELLAYAMBALAM TRIVANDRUM Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) 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.

(2.) AFTER hearing appellant's counsel and on going through the Tribunal's order, we do not find any ground to interfere with the Tribunal's order with regard to the validity of the reassessment completed under Section 147 because under the amended provisions, all what is required is sufficient reason for the Assessing Officer to initiate proceeding to bring to tax escaped income which includes any allowance wrongly allowed in the original assessment. Provision for bad debt is allowable only for Banks subject to conditions provided therein 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.