M/S VIJAYA BANK vs C.I.T

The Supreme Court ruled that for claiming a deduction under Section 36(1)(vii) of the Income Tax Act, it is not mandatory for an assessee to write off each individual debtor's account, as a mere provision for bad debts reflected in the Profit and Loss Account suffices. The Court upheld the Tribunal's decision that the assessee's practice of debiting bad debts and reducing the corresponding loans and advances in the Balance Sheet constituted an actual write-off. The judgment clarified that the provisions made by the assessee were adequate for the deduction claim, aligning with the precedent set by the Gujarat High Court in Vithaldas H. Dhanjibhai Bardanwala vs. CIT.