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of <h1>ITAT directs reassessment as per Circular, emphasizing fresh assessment opportunity for clarification.</h1> <h3>The Mahendergarh Central Cooperative Bank Ltd., Mahendergarh Versus ACIT, Rewari</h3> The Mahendergarh Central Cooperative Bank Ltd., Mahendergarh Versus ACIT, Rewari - TMI Issues: Confirmation of addition of interest claimed as deduction under the One Time Settlement Scheme for loan defaulters.Analysis:1. Background: The assessee, a cooperative bank, filed a return of income at Rs. 95,12,238. During scrutiny, the Assessing Officer noted an amount of Rs. 1,39,64,857 debited in the Profit/Loss Account as one-time scheme interest relief, significantly higher than the interest income earned.2. Assessing Officer's Disallowance: The Assessing Officer disallowed the entire claimed amount, stating that the bank had waived off interest without making efforts to recover it, without examining the Circular's applicability or if the deduction was claimed as per Circular provisions.3. Appeal to CIT (Appeals): The Ld. CIT (Appeals) upheld the disallowance, emphasizing the lack of follow-up action by the bank to recover outstanding amounts.4. Arguments Before ITAT: The assessee contended that expenses were incurred as per Registrar of Societies' guidelines and submitted Circular copy and borrower ledger accounts. The Assessing Officer disregarded these details.5. ITAT Decision: ITAT observed that lower authorities didn't examine the deduction in light of the Circular's terms. They directed re-examination by the Assessing Officer, considering Circular provisions and verifying if the waiver was claimed as per Circular.6. Conclusion: The appeal was allowed for statistical purposes, emphasizing the need for a fresh examination by the Assessing Officer in line with Circular provisions, ensuring the assessee's opportunity for explanation.This detailed analysis highlights the issues, background, arguments, and the ITAT's decision for the confirmation of the addition of interest claimed as a deduction under the One Time Settlement Scheme for loan defaulters.
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