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In a rural bank, bank has made a provision u/s 36(1)(viia) of The income tax against its rural bank advances few years ago and reduced the profit of that year accordingly. the Provision kept remain as it is in the balance sheet for some year, now the management of the bank wants to revert back the provision and wants to increase the profit even if there is no recovery in NPA Accounts.
Please suggest me that written back of provisions made in earlier year is valid as per law and Accounting Standards. Please tell me that as a auditor, what should I do? Should I Qualify my report and how can I qualify my report? Please give your valuable suggestion as per Law and Relevant Accounting Standards. If there is any Circular of RBI or NABARD in this regard, then you are requested to Please Provide Me that. |
