TaxTMI 
TaxTMI 
2016 (5) TMI 620
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....llant laid in the decision of Catholic Syrian Bank vs CIT decided by Supreme court reported in 18 taxmann.com 282. 2.1 The Ld CIT(A) ought to have considered section 36(1 )(vii) and Section 36(1 )(viia) are independent and cannot be intermingled or read into each other. . 2.2 The Ld CIT(A)grossly erred in not considering the word " Deduction" appearing in the section 36(viia) implies that an expenditure which an Assessee may subtract from Gross Total Income to determine taxable income" 2.3 The Ld CIT(A) failed to appreciate and consider provision already made by the Appellant in the books of account towards for NPA and Bad debt''. 2.4 The Ld CIT(A) grossly erred in not considering the basis of provision to be made for 36(viia) discussed in para 29 of the decision of Catholic Syrian Bank vs CIT decided by Supreme court reported in 18 taxmann.com 282. 2.5 The Learned CIT(A) further erred in stating the Appellant had not passed any provision in the books. 2.6 The Ld CIT(A) ought to considered that the case law relied by the Ld AO in State Bank of Patiala vs CIT reported in 143 Taxman 196 was no longer applicable after the decision ....
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....owance of Rs. 35,50,416/- since the balance provision was not disallowed, the Assessing Officer made addition of Rs. 60,00,000/- to the retuned income alongwith Rs. 2,13,92,491/- claimed as deduction u/s.36(1)(viia) of the Act on adhoc basis at 7.5% of gross total income as no satisfactory explanations was furnished in hearing proceedings, assessed total income of Rs. 29,12,33,214/- and raised demand. Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals). 5. The ld. Authorised Representative contested the action of the Assessing Officer in denying the claim u/s.36(1)(viia) of the Act and ignoring the provision of Rs. 95,50,416/- debited in the books of accounts and erred in not allowing claim based on the decision of State Bank of Patiala (supra). The ld. Authorised Representative also challenged the validality of reassessment proceedings and filed written submissions and supported the case with judicial decisions. The ld. Commissioner of Income Tax (Appeals) considered the additional grounds were the ld. Assessing Officer erred in not allowing deduction u/s.36(1)(viia) of the Act as per return of income and the deduction should be ....
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....tion of an amount not exceeding 7.5% of the total income ( in this case upto Rs. 7,61,10,421/- ) provided provision to the same amount is made in this accounts. In the assessee's case, provisions was made only to the extent of Rs. 1,06,63,566/- and the same was allowed. The assessee's further claim of Rs. 6,54,46,855/- was negative by the Assessing Officer. The assessee contended that the provision has been debited in the books of accounts and hence the same IS to be allowed as deduction and reliance was placed on the case of SBP vs CIT (2005) 272 ITR 54 (P&H). The contention of the assessee is far from truth since, the assessee debited Rs. 1,06,u3,566/- only in the Income and Expenditure ale under the head "''provisions and reserves made''. It is not known how the assessee placed reliance on the decision of P&H High Court in the case of SBP vs CIT and Another (2005) 272 ITR (54). The decision was actually against the assessee. It was clearly held as under: Making of a provision for bad and doubtful debt equal to the amount mentioned in this section is a must for claiming such deduction." "We are, therefore, satisfied that the Tribunal was right in holding that si....
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....ions" on the liabilities side of the balance sheet, then it would constitute a provision for doubtful debt. In the latter case, the assessee would not be entitled to deduction after 1-4-1989. ** ** ** 58. Section 36(1)(vii) provides for a deduction in the computation of taxable profits for the debt established to be a bad debt. Section 36(1)(viia) provides for a deduction in respect of any provision for bad and doubtful debt made by a scheduled bank or non-scheduled bank in relation to advances made by its rural branches, of a sum not exceeding a specified percentage of the aggregate average advances by such branches. 59. Having regard to the increasing social commitment, Section 36(1)(vii-a) has been amended to provide that in respect of provision for bad and doubtful debt made by a scheduled bank or a non- scheduled bank, an amount not exceeding a specified per cent of the total income or a specified per cent of the aggregate average advances made by rural branches, whichever is higher, shall be allowed as deduction in computing the taxable profits. Even Section 36(1)(vii) has been amended to provide that in the case of a bank to which Section 36(1 )(vi....