AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (3) TMI 558
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....rred in passing an order under section 263 setting aside the order of the Assessing Officer and directing him to pass a fresh assessment order. Your appellant submits that the order of the CIT is illegal, bad in law and void and the same be quashed. 2. The assessee before us is a nationalized bank. Its assessment under section 143(3) of the Act was completed on 28th December 2007. Subsequently, however, the Commissioner required the assessee to show cause as to why the said assessment not be subjected to revision proceedings under section 263 for the following reasons: a) The Assessing Officer, while passing the order under section 143(3) denied the deduction at Rs 403,88,23,861 claimed by you towards investment depreciation and se....
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....ual position, the Commissioner's powers under section 263 could not extend to the question of depreciation on investments. Without prejudice to this argument, it was also submitted that even on merits, the claim bank's claim of depreciation on securities amounting to Rs 403,88,23,861, which is in accordance with the principles laid down by Hon'ble Supreme Court in the case of UCO Bank Vs CIT (240 ITR 255), has bee allowed, and, consequently, depreciation of Rs 81,32,00,000 allowed by the AO will be automatically added back. As regards the point no. (b), it was submitted that if the provisions of NPA is added, actual write off has to be reduced from profits. It was contended that, on merits, the proposed adjustment is incorrect and clearly c....
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....es, entire investment portfolio has been treated as stock in trade and entire provision of Rs 81.33 crores has been allowed by the Assessing Officer. It was also noted that an amount of Rs 10.51 crores has been found to have been amortized during the year under consideration for the securities classified under HTM category. According to the CIT, the AO ought to have reduced this amount of Rs 10.51 crores from depreciation allowed on investment being transferred from one category to another category. He thus found the order erroneous on this count as well. Interestingly, however, he proceeded to set aside the order with direction to pass an order "afresh, after taking into account complete f acts and circumstances of the case, and applying t....
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....e, the debt is an amount receivable by the assessee and not any liability payable by the assessee and, therefore, any provision made towards irrecoverability of the debt cannot be said to be a provision for liability. Therefore it was held that Item (c) of the Explanation is not attracted to the facts of the case. Item (c) in Section 115JA and 115-JB(1) are identical. In order to attract the Explanation the debt which is doubtful or bad should satisfy the requirement contemplated in Item (c) of the Explanation. It is the amount or amounts set aside as provisions made for meeting the liability other than the ascertained liabilities. In the instant case also the bad and doubtful debt for which a provision Is made which is in the nature of dim....
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....l position. However it was clarified that besides debiting the profit and loss account and creating a provision for bad and doubtful debt, the assessee correspondingly/simultaneously obliterated the said provision from its accounts by reducing the corresponding amount from loans and advances/debtors on the assets side of the balance sheet and, consequentially, at the end of the year, the figure in the loans and advances or the debtors on the assets side of the balance sheet was shown as net of the provision for the impugned bad debt. Then the said amount representing bad debt or doubtful debt cannot be added in order to compute book profit. Therefore, after the Explanation the assessee is now required not only to debit the profit and loss a....