2012 (10) TMI 1176

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....owing provision of Rs. 2,26,255 for standard assets as per Reserve Bank of India mandatory guidelines applicable to the assessee which is carrying Banking Business and has completely ignored the submissions of the Assessee made before him. Hence the addition confirmed by the CIT(Appeals) need be deleted. 2. The learned CIT(Appeals) has not passed any order on the submissions of the Assessee to allow the deduction of the income in respect of which the TDS has been deducted in A.Y. 2008-09 but deposited during A.Y. 2009-10. Definite order be passed as admissible u/s 40(a)(ia) of the IT Act." 2. At the time of hearing, the learned AR of the assessee did not press ground No.2, and as such, the said ground is dismissed as not pressed....

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....5. We have heard both the parties and perused the impugned orders of the authorities below and also considered the material placed on record. The learned AR of the assessee contended that the provision for loss on standard assets is nothing but a provision towards bad & doubtful debts as is the case of substandard and loss assets. In the case, of the Standard Assets, provision allowed to be created as a percentage of the outstanding Loans & Advances is much less compared to that for the other types of Loans & Advances classified as substandard or loss Assets by the bank as per the guidelines of RBI. It is not a liability, much less a contingent or unaccrued one. It is only a provision for loss towards bad & doubtful debts, as per the pruden....

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....he Banking Regulation Act, 1949, the Reserve Bank of India has been empowered to issue directions to all the banks as to regulate the banking business in the public interest or in the interest of banking policy. After discussing what has been submitted by the assessee before him, the Id. CIT(A) observed that the assessee had no option but to claim the same and the claim, even if notional, is exclusively laid out for the purpose of smooth running of banking business and there is no reason not to allow the same to the assessee. It is a statutory claim allowable on the analogy of 30% deduction allowed in respect of income under the head house property, without making it necessary to show the evidence of such expense having been actually incurr....