Tribunal upholds Income Tax Act disallowance, limits deduction to book provision, affirms loss adjustment. Section 115JB not applicable.

The Tribunal upheld the disallowance under Section 36(1)(viia) of the Income Tax Act, restricting the deduction to the provision made in the books. It also affirmed the adjustment of brought forward losses for computing total income under the same section. Additionally, it supported the view that Section 115JB does not apply to banking companies, thus not adjudicating related grounds. The Tribunal's decisions aligned with legal precedents and previous rulings in the assessee's cases, leading to the dismissal of both appeals.

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Issues Involved:
1. Disallowance under Section 36(1)(viia) of the Income Tax Act, 1961.
2. Adjustment of brought forward losses for computing total income under Section 36(1)(viia).
3. Non-adjudication of grounds relating to additions made while computing book profit under Section 115JB(2).

Issue-wise Detailed Analysis:

1. Disallowance under Section 36(1)(viia):
The primary issue pertains to the disallowance of Rs. 92,14,87,404 under Section 36(1)(viia). The Assessing Officer (AO) disallowed the excess claim of Rs. 811,52,49,133, citing that the deduction should be restricted to the provision made in the books of accounts. The CIT (A) upheld this view, referencing the Hon'ble Punjab & Haryana High Court and Bangalore ITAT's decision in Canara Bank, which stated that the deduction under Section 36(1)(viia) must correspond to the actual provision made in the books. The Tribunal, following its previous decision in the assessee's own case, dismissed this ground, confirming that the deduction cannot exceed the provision debited in the books.

2. Adjustment of brought forward losses for computing total income under Section 36(1)(viia):
The second issue involves the method of computing total income for the purpose of allowing deduction under Section 36(1)(viia). The AO adjusted the brought forward losses to arrive at the total income before computing the deduction. The CIT (A) and the Tribunal upheld this method, referencing the Supreme Court's decisions in Distributors (Baroda) (P.) Ltd. v. Union of India and H.H. Sir Rama Verma v. CIT, which necessitate computing total income in accordance with the Act's provisions before allowing specific deductions. The Tribunal confirmed that the method adopted by the AO, which includes setting off brought forward losses, is correct.

3. Non-adjudication of grounds relating to additions made while computing book profit under Section 115JB(2):
For the assessment year 2012-13, the CIT (A) did not adjudicate grounds related to various additions made while computing book profit under Section 115JB(2), as it held that Section 115JB does not apply to banking companies. The CIT (A) relied on the Tribunal's decision in the assessee's case for AY 2007-08 and other relevant cases, which stated that the provisions of Schedule VI to the Companies Act do not apply to banking companies, thus exempting them from Section 115JB. The Tribunal upheld this view, noting that the CIT (A)'s decision was based on binding precedents and that the assessee could seek further adjudication if a superior court reverses these decisions.

Conclusion:
The Tribunal dismissed both appeals, upholding the disallowance under Section 36(1)(viia) and the method of computing total income by adjusting brought forward losses. It also supported the CIT (A)'s decision that Section 115JB does not apply to banking companies, thereby not adjudicating the related grounds. The Tribunal's decisions were consistent with established legal precedents and previous rulings in the assessee's own cases.

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