TaxTMI 
TaxTMI 
2013 (4) TMI 752
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.... of Rs. 9,36,26,923/-).It is submitted that the above expenditure is for the purpose of expansion of an industrial undertaking within the purview of industrial undertaking mentioned in the Industrial Disputes Act.Your appellants submit that the expenditure ought to have been allowed as claimed by the appellants. Without prejudice to the above, your appellants submit that the above expenditure is in the nature of revenue expenditure and ought to be allowed under section 37(1) in full of Rs. 9,36,26,923/-." 3.1.During the assessment proceedings,AO found that bank had issued shares to the public for which an expenditure amounting to Rs. 9.36 Crores was incurred,that the assessee had claimed deducti-on at 1/10th of the issue expenses u/s. 35D of the Act amounting to Rs. 93.62 Lakhs. Following the judgments of Hon'ble Supreme Court delivered in the cases of Brooke Bond (225 ITR 798)and Punjab State Industrial Development Corporation (225 ITR 792),he held that expenditure claimed by the assessee could not be allowed u/s. 35D of the Act.In the appellate proceedings; following the orders of his predecessors for earlier years;FAA upheld the order of the AO.When the matter travelled to th....
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....ty shares amounting to Rs. 93,56,000/-.Your appellants submit that the above expenditure is for the purpose of expansion of an existing industrial undertaking within the meaning of the industrial undertaking mentioned in the Industrial Disputes Act.Your appellants submit that the above expenditure ought to have been allowed as claimed by the appellants. 4.Disallowance U/S 14A of Rs. 55,03,74,407/- a)The learned Commissioner of Income Tax (Appeals) erred in confirming the disallowance u/s. 14A of estimated interest expense of Rs. 53,46,38,l34/- as expenditure attributable to the exempt income received by your appellant. Your appellants submit that the income claimed as exempt ought not to have been reduced by estimating interest of Rs. 53,46,38,l 84/- as incurred for earning exempt income. b)The learned Commissioner of Income Tax (Appeals) erred in confirming the disallowance u/s. 14A of estimated administrative expense of Rs. 1,57,36,223/-calculated at 2% of total tax exempt income of Rs. 78,68,l 1,161/-,as expenditure attributable to exempt income received by your appellant. Your appellants submit that the income claimed as exempt ought not to have been ....
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.... Tribunal to the AO.DR submitted that matter could be decided by on merits.We have heard the rival submissions and perused the material available on record.We find that while deciding the appeal for the AY.1997-98 D Bench of the Mumbai Tribunal has held as under : "After considering the rival submissions and perusing the relevant material on record, it is noticed that the AD made, disallowance by reducing proportionate expenses from the interest receipt by determining the correct amount of income which was exempt- u/s.10(15).In other words, he applied the prescription of sec.14A.We find that this issue is no more res integra.In view of the judgment of the Hon'ble jurisdictional High Court in Godrej & Boyce Mfg, Ltd. vs.DCIT (2010) 328 ITR 81 (Bom.) in which it has been held that disallowance is called for u/s,14A in such circumstances. However, the manner of computation of such disallowance has been restored. to the file of AO for making on some reasonable basis. It has further been held in this case the provisions of Rule 8D are not applicable as these are prospective. Respectfully following the precedent, we set aside the impugned order and direct the AO to compute disal....
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....oner of Income Tax (Appeals) erred in merely directing the Assessing Officer to compute the disallowance u/s. 14A on a 'reasonable basis' without giving any directions as to the' basis of computing such disallowance. 3)The learned Commissioner of Income tax erred in confirming addition made by the Assessing Officer of Rs. 46,33,953/- as prior period expenses. Your appellants submit that these expenses are allowable as claimed. Your appellants submit that the Assessing Officer be directed to delete the addition of Rs. 46,33, 953/- on account of id expenditure. 4).(a)The learned Commissioner of Income Tax (Appeals) erred in action of Assessing Officer in computing the income of your appellant u/s.115JB of the Income Tax Act, 1961, Your appellant submits that the provisions of Sec. 115JB are not applicable to your appellant's case. (b)Without prejudice to the above, your appellant submits that they should be allowed to recast the profit & loss account as per the provisions of Companies Act, 1956 and the net profit as per the recasted profit & loss account should be considered for arriving at the book profit." 6.1.Ground nos.1a) and 1b) have already been d....
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.... interest expenditure was mainly due to renewal of Fixed Deposits which matured during the year however were not renewed by the FDR-holder immediately but were renewed only after a certain time lag where the bank was required to pay the interest to the FDR holder with retrospective effect at the rate applicable to the said FDR.,that the said interest crystallised only in the period when it was debited,that the said expenses were not really prior period in nature since the liability in respect of the said expenses was 'crystallised' during the year.Further, he relied on the decisions delivered by the various Benches of ITAT, Mumbai-Toyo Engineering India Ltd., [SOT 616 (Mum)],Union Bank of India(ITA Nos.4720&4724/Mum/2010dt.30-06-2011)and Bank of India(ITA No.2155 & 2443 /Mum/2011 AYs. 2002-03 dt. 30-07-2012)DR relied upon the order of the 'I' Bench of Mumbai Tribunal delivered in the case of Tipco Industries Ltd.(Tipco)on 3.08.2012. 8.3.We have heard the rival submissions and perused the material on record.We find that facts of the case under consideration and that of Tipco are totally different.In the case of Tipco nothing had been brought on record to substantiate its claim ne....
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.... ITAT 'B' Bench,Mumbai and Indian Bank (ITA No.469/MDS/2010 dt.30-08-2011)delivered by the 'C'Bench of Chennai and the matter of ICICI Lombard General Insurance Company Ltd., reported by 2012-TIOL- 690-ITAT-Mum. Departmental Representative (DR) supported the orders of the FAA. 9.2.We find that the issue of applicability of Section 115JB has been discussed by the 'B' Bench of Mumbai Tribunal in the case of Union Bank of India (supra) in favour of the assessee.In that matter Tribunal has held as under: "18. Ground No. 5 (in ITA No. 4706/M/10 -A.Y.2006-07) relates to applicability of the provi-sions of Sec.115JB 19.This issue is covered by the decision of the Jurisdictional High Court in the case of Kurung Thai Bank PCL)(ITA No. 3390/M/90 dt. 30.9.2010.The Ld.CIT(A)however followed the decision of the ITAT in assessee's own case for the assessment year 2001-02 in ITA No. 9061 / M/0420.The Ld. AR of the assessee has submitted as follows: "The appellant further submits that the appellant is not a company under Companies Act but is only deemed to be a company as per the provisions of Sec. 11 of the Banking Companies (Acquisition and Transfer of Undertaking)A....
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.... 4.On the facts and in the circumstances of the case and in law, the CIT(A) erred in holding that the amount of tax paid u/s 115JB is Income tax only and credit be given on tax computed u/s 88E and section 88E is applicable for tax paid on normal computation only." 10.1.Effective Grounds of Appeal filed by the AO i.e. Grounds no.2 and 3 are about deduction u/s.36 (1)of the Act.During the assessment proceedings,AO found that the assessee had claimed deduction of provision made for bad and doubtful debts calculating as per the guidelines issued by the RBI at Rs. 2,36,91,66,153/-.AO after making enquiries and considering the submissions of the assessee,granted deduction of actual debts written-off after adjusting provision for rural debts made at 10% and average rural advances and a provision for bad and doubtful debts calculated at 7.5% of total income.The details of actual debts written-off and provisions allowed under the Act can be summarised as under: Amount (in Rs) Details of Bad debts written off: Rural Debts written off 9,31,69,000 Non-rural Debts written off 2,64,30,51,573 Total Debts written off 2,73,62,20,573 Details of pr....
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....on on account of the provision for bad and doubtful debt(s) are distinct and independent of the provisions of section 36(1)(vii) relating to allowance of the bad debt(s). In other words, scheduled commercial banks would continue to get the full benefit of the write off of the irrecoverable debt(s) under section 36(1)(vii) in addition to the benefit of deduction for the provision made for bad and doubtful debt(s) under section 36(1)(viia). Normally, a deduction for bad debt(s) can be allowed only if the debt is written off in the books as bad debt(s). But in the case of rural advances, a deduction would be allowed even in respect of a mere provision without insisting on an actual write off. However, this may result in double allowance in the sense that in respect of the same rural advance the bank may get allowance on the basis of clause (viia) and also on the basis of actual write off under clause (vii). This situation is taken care of by the proviso to clause (vii) which limits the allowance on the basis of the actual write off to the excess, if any, of the write off over the amount standing to the credit of the account created under clause (viia). The CBDT itself has recognized t....