TaxTMI 
TaxTMI 
2021 (1) TMI 357
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....nces 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, the claim for deduction cannot be allowed in view of claus....
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....tion 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 and doubtful debts. The provisions of section 36(1)(viia) of the Act reads as follow....
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....pril, 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 in the return of income under the head "Profits and gains of business or profession." Explanation.--For the purposes of this sub-clause,....
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....eduction 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 [3,66,67,797-1,49,66,472). This was claimed by the assessee as deduction being 10% of the aggregate average advances made by Rural Branches in the manner prescribed by the Rul....
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....aining 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 particulars. 17. According to the AO, the aforesaid payments fell within the mischief of section 194C and 194J of the Act. Since the assessee did not deduct tax at source on the aforesaid payments, the AO....