2015 (3) TMI 229

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....11. 2 These cross appeals are directed against the orders passed by the Commissioner of Income-tax(Appeals)-I at Madurai on 28.03.2014. The appeals arise out of the assessments completed under sec.143 of the Income-tax Act, 1961. 3. First we will consider the three appeals filed by the Revenue. 4. The common ground raised by the Revenue in these appeals is that the Commissioner of Income-tax(Appeals) has erred in interpreting Rule 6ABA of the Income-tax Rules, 1962, in determining the correct amount of deduction available to the assessee bank towards provision for bad and doubtful debts. The Commissioner of Income-tax(Appeals) has erred in holding that the deduction under sec.36(1)(viia) is to be based on cumulative advance amount ....

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.... there is no provision to consider only the advances made during the year under consideration. It is the funding of the Assessing Officer that the assessee has furnished the working as per Rule 6ABA. It is not in dispute that the working is as per Rule 6ABA but the Assessing Officer seems to have interpreted the provision not warranted by law. Therefore, we uphold the order of the Commissioner of Income-tax(Appeals) allowing the deduction to the assessee." In the light of the order of the Tribunal as stated above, we hold that the computation made by the assessee is as per law and the Commissioner of Income-tax(Appeals) has rightly upheld the computation made by the assessee against the deduction towards provision for bad and doubtful de....

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.... of its profits and not as a charge to its profit and loss account. Therefore, the assessee has not claimed any such transfer to reserves as deduction in computing the taxable income for those assessment years in which such transfers were made to the reserves. It was only an appropriation in its account. Therefore, it is obvious that when such amounts transferred earlier to the reserves are reversed and brought back in the working account of the assessee bank by crediting the profit and loss account, such credit amounts cannot be treated as forming part of taxable income. Because such reserves have already suffered tax in the earlier assessment years, as the assessee has not claimed any deduction against the amounts transferred to reserves.....