'deferred tax - as 22' for bddr provision disallowed

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This query is : Resolved

yuvak (Querist)

02 January 2013 Dear Experts,

- A Cooperative Bank enjoyed the tax benefit of 100% deduction on its Total Income till AY 2006-07 (u/s 80P(2))

- Till AY 2006-07, in the tax computations, the BDDR provisions where disallowed and therefore, taxable income was significantly higher than book profit (though NO TAX was paid b'coz of dedn u/s 80P)

- Now, from AY 13-14, amounts are recoverable against the BDDR provisions, and the recovery proceeds are recoverable over next few years (based on court orders allowing deferred payments by defaulters).

- Can the entire tax savings on such BDDR provisions be considered as 'Deferred Tax Asset' for AY 2013-14?

Thanks in advance for response

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)

18 January 2013 Yes in my opinion you should have asked what and how the bad debt recovery is to be treated during taxability period.

Any recovery against any exempted period should be treated as exempted as in the past no disallowance was made and even disallowance woold have been made no tax could have been imposed. So the proceeds should be taken below the line in P & L A/c

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