BHARATI SAPRU,J. - (1.) Heard Sri Subham Agarwal, learned counsel for the department.
(2.) This appeal has been filed against the order of the Income Tax Appellate Tribunal for the assessment year 2007- 2008 in case of assessee a district cooperative bank engaged amongst others in granting advances in rural areas. Learned counsel for the appellant has raised two substantial questions of law quoted as below:- "(1) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in confirming the order of the CIT (A) deleting the disallowance of bad debts of Rs. 2,84,42,000/- claimed by the assessee by completely ignoring the fact that the assessee had not credited the amount of bad debt in the individual account of the debtors? (2) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in confirming the order of the CIT (A) agreeing in principle that exemption under section 10 (34) of the Act is available to the assessee in respect of dividend income of Rs. 20,03,000/- despite the admitted fact that the assessee had neither claimed exemption of dividend income under section 10 (34) of the Act in its return of income nor at the time of assessment proceedings and this dividend income was even reflected in the profit and loss account submitted/filed by the assessee alongwith its return of income?"
(3.) During the assessment proceedings, the Assessing Authority disallowed the provision on account of bad debts - Rs. 2,84,42,000/- under clause (vii) of Section 36(1) of the Income Tax Act, 1961 (hereinafter referred as to the Act). Also, in view of the fact that the assessee had himself offered to tax dividend income of Rs. 20,03,000/-, the Assessing Officer proceeded to tax the same.;