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of <h1>ITAT directs deletion of disallowance for standard assets provision</h1> <h3>M/s. The Mayurbhanj Central Cooperative Bank Ltd. Versus Asst. Commissiner of Income-tax, Balasore Circle, Balasore</h3> M/s. The Mayurbhanj Central Cooperative Bank Ltd. Versus Asst. Commissiner of Income-tax, Balasore Circle, Balasore - TMI Issues Involved:1. Disallowance of provision for standard assets as per RBI guidelines.2. Deduction of income with TDS deducted in AY 2008-09 but deposited in AY 2009-10.Analysis:Issue 1: Disallowance of provision for standard assets as per RBI guidelinesThe appellant contested the disallowance of Rs. 2,26,255 for standard assets provision by the CIT(A) for AY 2008-09. The CIT(A) upheld the disallowance, citing provisions as not permissible expenditure under the IT Act and akin to capital expenditure. The appellant argued that the provision for standard assets is a provision for bad and doubtful debts, eligible for deduction under section 36(1)(viia). The ITAT considered the prudential norms prescribed by RBI, emphasizing that the provision is mandatory for banks and not a contingent liability. Relying on a decision of ITAT Amritsar, the ITAT ruled in favor of the appellant, directing the AO to delete the disallowance and allow the claim.Issue 2: Deduction of income with TDS deducted in AY 2008-09 but deposited in AY 2009-10The appellant raised a ground regarding the deduction of income for which TDS was deducted in AY 2008-09 but deposited in AY 2009-10. However, during the hearing, the appellant did not press this ground, leading to its dismissal as not pressed.In conclusion, the ITAT partially allowed the appeal of the assessee concerning the disallowance of provision for standard assets, directing the AO to delete the disallowance. The judgment emphasizes the distinction between provisions for standard assets and contingent liabilities, ensuring compliance with RBI guidelines and statutory deductions under the IT Act.
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