2012 (9) TMI 610

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....Rs.36,75,000/- made by the A.O. by disallowing the provision for standard assets. 1(a) While allowing the relief of RS.36,75,000/- Ld. CIT(A) has failed to appreciate that the AO has clearly held that out of provision of Rs.50,00,000/- only Rs.13,25,000/- were on a/c of bad and doubtful debts and the balance amount of Rs.36,75,000/- was on account of standard assets and as per provisions of section 36(1)(viia) only provision for bad and doubtful debts was allowable as deduction. 2. It is prayed that the order of the ld. CIT(A) has failed to appreciate that it was contingent liability and was not allowable as business expenditure. 3. The appellant requests for leave to add or amend or alter the grounds of appeal before the appeal is....

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....rovision for bad and doubtful debts account made under the clause. We have fulfilled both the conditions mentioned above i.e. provision made for bad & doubtful debts is well within prescribed limits and the amount has been actually debited to the provision for bad & doubtful limits and the amount has been actually debited to the provision for bad & doubtful debts during the year. Hence, it is a very much allowable deduction in our case. As regards decision of Hon'ble Special Bench of ITAT, Delhi in the case of New India Industries Ltd. vs. ACIT 2007, 18 SOT 51, it was in the case of a non banking finance company in respect of deduction u/s 36(1)(vii) of the Income Tax Act. Whereas ours is a bank and our claim is u/s 36(1)(viia) of Inc....

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.... and balance of Rs.36,75,000/- is against standard assets. On the other hand the provision in respect of standard assets represents only a contingent liability not allowable as business expenses. Therefore, an addition of Rs.36,75,000/- is made to the total income of the assessee." 4. Before the Ld. CIT(A), the assessee submitted the explanation especially the meaning of standard, sub-standard and doubtful or loss depending upon the nature of advance and value of security available against such loan, which are the guidelines of Reserve Bank of India (In short 'RBI') and the assessee has followed those guidelines. The assessee submitted the explanation available at Ld. CIT(A)'s order at pages 1 to 7 in paras 7. The same was considered ....