TaxTMI 
TaxTMI 
2021 (1) TMI 357
X X X X Extracts X X X X
X X X X Extracts X X X X
....llows:- "2. On the facts and in the circumstances of the case, the learned CIT(A) erred in disallowing provision made for privileged leave encashment to the tune of Rs. 2,84,07,024/- which was made on actual valuation, treating the same as contingent liability without appreciating the submission of Appellant." 4. The assessee is a regional rural bank established under Rural Banks Act and is a scheduled bank classified under second Schedule of RBI, having several Rural Branches. The assessee had claimed a deduction of a sum of Rs. 2,84,07,024 on account of provision for leave encashment. The AO was of the view that the aforesaid expenditure was a contingent expenditure and cannot be allowed as a deduction. According to the AO, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot be allowed as deduction, unless it is actually paid and deduction is allowed only in the previous year in which the sum is actually paid, the claim made by the assessee for deduction cannot be sustained. We therefore uphold the order of CIT (Appeals) and dismiss ground No. 2. 9. Grounds No. 3 & 4 raised by the assessee reads as follows:- "3. The learned CIT (A) in further erred in disallowance provision made for bad and doubtful debts of Rs. 2,17,01,324/- u/s. 36(1)(viia) of the Income Tax Act. 4. The learned CIT (A) erred in not following ratio of various case laws relied by the Assessee in support of the claim." 10. The aforesaid claim of the assessee is in respect of deduction on account of provision for bad an....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that for the relevant assessment years commencing on or after the 1st day of April, 2003 and ending before the 1st day of April, 2005, the provisions of the first proviso shall have effect as if for the words "five per cent", the words "ten per cent" had been substituted:] Provided also that a scheduled bank or a non-scheduled bank referred to in this sub-clause shall, at its option, be allowed a further deduction in excess of the limits specified in the foregoing provisions, for an amount not exceeding the income derived from redemption of securities in accordance with a scheme framed by the Central Government: Provided also that no deduction shall be allowed under the third proviso unless such income has been disclosed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the last day of the previous year.]" 11. A perusal of the aforesaid provision would show that the assessee gets two deductions under the aforesaid provision; (1) a deduction to the extent of 7.5% of the total income computed before making any deduction under clause (viia) of section 36(1) Chapter VIA; and (2) an amount not exceeding 10% of the aggregate average advances made by the Rural Branches computed in the prescribed manner. 12. The assessee claimed deduction u/s. 36(1)(viia) of a sum of Rs. 3,66,67,797. Out of the aforesaid sum, deduction on account of 7.5% of total income was a sum of Rs. 1,49,66,473 and this sum was allowed as a deduction by the AO. The dispute is only with regard to the remaining sum of Rs. 2,17,01,324 [3,66....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ules. 14. Ground No. 5 raised by the assessee reads as follows:- "5. The learned CIT (A) further erred in disallowing 10,83,977/- u/s. 40(a)(ia) in spite of Assessee obtaining form no. 15G/15H from depositors." 15. For the FY 2012-13 relating to the AY 2013-14, the assessee had incurred the following expenses which have been reported in Form No. 3CD under item (f) of para 17:- i. Payment to contractors Rs. 10,83,977 ii. Payment of professional fee Rs. 50,000 16. The AO was of the view that the aforesaid payments fall under the provisions of section 194C and 194J of the Act respectively. The assessee was asked to explain the details of TDS made on such payment. The assessee did not file the required partic....