ITAT Rejects Cooperative Bank’s Bad Debt Reserve Claim u/s 36(1)(viia), Allows FD Loss as Business Expense

ITAT Rejects Cooperative Banks’ Bad Debt Reserve Claim: The Income Tax Appellate Tribunal (ITAT) has rejected a cooperative bank’s claim for a reserve deduction under Section 36(1)(viia) for bad debts. The bank had sought to claim deductions on the provisions made for bad debts, but the ITAT ruled that such provisions could not be allowed as deductions. However, the ITAT allowed a claim for losses on fixed deposits, affirming that business expenses incurred in relation to FDs could be deducted. This ruling clarifies the tax treatment of bad debts and business expenses for cooperative banks, providing further guidance on allowable deductions.