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of <h1>ITAT Bangalore: Co-op bank appeal allowed despite delay, directs AO review on bad debts</h1> <h3>Jamkhandi Urban Co-operative Bank Ltd. Versus Asst. Commissioner of Income-Tax, Circle-1, Bijapur</h3> Jamkhandi Urban Co-operative Bank Ltd. Versus Asst. Commissioner of Income-Tax, Circle-1, Bijapur - TMI Issues:Delay in filing appeal, Deduction claimed under section 36(1)(viia), Applicability of the judgment in Gotze (India) Ltd. caseThe Appellate Tribunal ITAT Bangalore heard an appeal by a co-operative bank against the CIT(A)'s order for the assessment year 2007-08. The delay of four days in filing the appeal was condoned after considering the affidavit filed by the assessee. The case involved the assessee claiming a deduction under section 36(1)(viia) for bad and doubtful debts and advances made by rural branches. The AO allowed a deduction of 7.5% of total income but disallowed the additional deduction for advances made by rural branches as it was not claimed in the return of income. This decision was based on the judgment in Gotze (India) Ltd. vs. CIT. The CIT(A) upheld the AO's decision, citing the same judgment. The assessee appealed to the Tribunal, challenging the partial allowance of the deduction under section 36(1)(viia) and the applicability of the Gotze (India) Ltd. judgment.During the hearing, the AR of the assessee reiterated the grounds of appeal, while the Departmental Representative referred to the CIT(A)'s order. The Tribunal considered the arguments and the Gotze (India) Ltd. judgment. It clarified that the said judgment did not limit the power of the Appellate Tribunal under section 254 of the Act. Therefore, the Tribunal directed the matter to be sent back to the AO to reconsider the assessee's claim on merits after providing an opportunity for hearing. The assessee was instructed to cooperate by providing necessary details. Consequently, the appeal of the assessee was allowed for statistical purposes.In conclusion, the Tribunal's decision addressed the delay in filing the appeal, the deduction claimed under section 36(1)(viia), and the interpretation of the Gotze (India) Ltd. judgment. The Tribunal exercised its power to remand the matter to the AO for a fresh decision on the deduction claimed by the assessee, emphasizing the need for a thorough review of the claim on its merits.
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