2018 (5) TMI 903

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.... following questions have been suggested by the Revenue for admission of appeal: "i. Whether on the facts and in the circumstances of the case the Ld. Tribunal has erred in law in allowing deduction under section 36(1)(viia) of the I.T.Act, 1961, for the same advances made for all previous years leading to multiple deductions in every assessment year by misinterpreting the Rule 6ABA of the I.T. Rules, 1962 and also against the ratio of judgment in the case of J.K Synthetics Ltd. vs. UOI 199 ITR 43 (SC)." ii. Whether on the facts and in the circumstances of the case conclusion arrived at by the Ld. Tribunal in granting the aforesaid relief to the assessee, is perverse" Relevant facts are that the assessee is a regional r....

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....ion of section 36(1)(viia)(a) made it clear that the aggregate average balance of advances made by the rural branches has to be calculated considering the loans and advances made during the year only by the rural branches of the bank in the prescribed manner as envisaged under Clause (viia)(a)of section 36(1), not on the cumulative balance of loans and advance of the bank over the years. Bad debt, if any, arises out of advances made in the earlier years would be covered under clause (viia) of section 36(1) of the I.T.Act. In the light of above discussion, the AO is, it is found that the AO has rightly computed the deduction allowable to the assessee bank under Clause (viia)(a) of section 36(1). His action is confirmed." The asse....

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....ng double deduction which is not permissible on computation made under Rule 6ABA. He submitted a double deduction in the manner thus obtained by the assessee has not been expressly provided. He relied on a judgment of the Supreme Court in the case of Escorts Ltd. v. Union of India reported in (1993) 199 ITR 43, on the following portion in the said judgment appearing in page 64 of the report. "A double deduction cannot be a matter of inference, it must be provided for in clear and express language, regard being had to its unusual nature and its serious impact on the revenues of the State." Mr. Khaitan, learned senior Advocate appeared on behalf of the assessee and submitted that the computation to be made as prescribed by Rule 6A....