TaxTMI 
TaxTMI 
2020 (3) TMI 1374
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....19 in respect of depreciation on securities which had fallen due for redemption during year ended 31 March 2000 but redemption proceeds were not received. 3. The Ld. CIT(A) erred in confirming the disallowance of Rs. 48,06,293/- in respect of payments for scientific research. 4. The Ld. CIT(A) erred in upholding the action of the AO in disallowing expenditure to the extent of Rs. 540,33,97,488/- by applying the provisions of section 14A read with rule 8D. The Ld. CIT(A) erred in not appreciating that the appellant has not specifically borrowed any funds for making investment in tax free bonds, the appellant has sufficient own funds to make investment in tax free bonds and that only the actual expenditure could be considered for disallowance and not the notional expenditure. The Ld. CIT(A) erred in not that the Bank's investment in securities yields two streams of income viz. business income which is taxable and dividend income which is exempt and accordingly the expenditure (if any) to be disallowed can be only in relation to exempt dividend income. 5. The Ld. CIT(A) erred in upholding the action of the AO in disallowing the appellant's claim in respect of de....
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....(A) erred in upholding the action of the AO of not allowing the provisions made by the appellant in respect of its foreign offices. 12. Each one of the above grounds of appeal is without prejudice to the other. 13. The appellant reserves the right to amend, alter or add to the grounds of appeal." 4. The brief facts of the case are that the assessee filed its return of income showing total income of Rs. 24,27,86,96,230/- on 30.11.2000 along with computation of Income, Profit & Loss Account and Balance Sheet and Audit Report in form 3CA and 3CD. The return was processed on 27.03.2002 for the same total income. Thereafter, the case of the assessee was selected for scrutiny and notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. The assessee is a Public Sector Bank carrying on the business of banking for the last many years. After considering the various issues, the AO assessed the total income to the tune of Rs. 35,399,283,940/-. The deduction for provisions for bad debts u/s 36(1)(viia) of the Act was allowed in sum of Rs. 925,67,73,295/-. The book profit u/s 115JB of the Act was assessed in sum of Rs. 872,98,93,062/-. Feeling aggrieved, the asse....
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....es. The assessee has claimed a sum of Rs. 2,23,86,418/- towards depreciation of investments. The AO disallowed the claim of the assessee and the CIT(A) has confirmed the action of the AO. We have heard the Ld. AR as well as Ld. DR and considered the relevant material on record. The CIT(A) has decided the issue in para 9 as under: "9. The ninth effective ground of appeal is against the disallowance of Rs. 2,23,86,418/- being the provision for diminution in the value of securities which had matured and become due for redemption during the year but were not redeemed. It was contended before the A.O. that in some cases, the companies or the State Governments who had issued the relevant securities were not able to pay the amount due on redemption. The appellant treats these securities as non- performing assets and a provision is made at a certain percentage for diminution in their value as in the case of other non-performing assets. There may be some delay on the part of the companies or the State Governments in paying the redemption amount. But, whenever the payment would be made it cannot be expected to be less than the face value. On the date of maturity, the whole of the amount o....
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....The assessee has claimed a sum of Rs. 2,23,86,418/- towards depreciation of investments. The AO disallowed the claim of the assessee and the CIT(A) has confirmed the action of the AO. We have heard the Ld. AR as well as Ld. DR and ITA No. 4736 & 4598/M/2010- State Bank of India 10 considered the relevant material on record. The CIT(A) has decided the issue in para 9 as under: "9.The ninth effective ground of appeal is against the disallowance of Rs. 2,23,86,418/- being the provision for diminution in the value of securities which had matured and become due for redemption during the year but were not redeemed. It was contended before the A.O. that in some cases, the companies or the State Governments who had issued the relevant securities were not able to pay the amount due on redemption. The appellant treats these securities as nonperforming assets and a provision is made at a certain percentage for diminution in their value as in the case of other non-performing assets. There may be some delay on the part of the companies or the State Governments in paying the redemption amount. But, whenever the payment would be made it cannot be expected to be less than the face value. On the....
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....this ground of appeal is dismissed." 8. On appraisal of the above mentioned finding, we find that this issue has already decided against the assessee by Hon'ble ITAT in the assessee's own case for the A.Y. 1996-97, 1997-98 & 1998-99 bearing ITA. No.5470/M/2002, 3823 & 3824/M/2002. Nothing came into noticed that the finding has been changed or varied at this stage. Therefore, by reliance upon the decision of the Hon'ble ITAT in the assessee's own case for the A.Y. 1999-2000 (supra). We decide this issue in favour of the revenue against the assessee. ISSUE No. 3 9. Under this issue the assessee has challenged the disallowance of payments for scientific research. The Ld. Representative of the assessee has admitted that this issue has been decided against the assessee by Hon'ble ITAT in the assessee's own case for the A.Y. 1999-2000 Bearing ITA. No. 4736/M/2010 & 4598/M/2010 dated 31.01.2018. The relevant finding has been given in para no. 11 to 13 which is hereby reproduced as under.:- "11. Ground No. 3 relates to Disallowance of Rs. 38,89,011/- in respect of payments for Scientific Research. The ld. AR of the assessee conceded that this ground of a....
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.... in the assessee's own case for the A.Y. 1998-99 bearing ITA. No.3824/M/2005. Nothing came into noticed that the finding has been changed and varied. No law has been produced before us in support of any contention raised by assessee. Taking into account all the facts and circumstances and by relying upon the decision of the Hon'ble ITAT in the assessee's own case for the A.Y. 1999-2000, we decide this issue in favour of the revenue against the assessee. ISSUE No. 4 11. Under this issue the assessee has challenged the disallowance of expenses in sum of Rs. 540,33,97,488/- by applying the provisions of Section 14A r.w. Rule 8D. We find that the issue has already been remanded by Hon'ble ITAT in the assessee's own case for the A.Y. 1999-2000 by giving certain directions and to follow the certain law as mentioned in the order. The Hon'ble ITAT in the assessee's own case for the A.Y. 1999-2000 4736/M/2010 & 4598/M/2010 dated 31.01.2018 has decided the issue. The relevant finding has been given as under.:- "14. Ground No. 4 relates to disallowance of expenses of Rs. 4,48,16,70,145/- for earning exempt income u/s. 10(15)(iv)(c) & (f), 10(15)(iv)(h), 10....
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....prises Ltd. Vs. DCIT (ITA No. 1362 & 1032/Del/2013) (Delhi Tribunal, EIH Associated Hotels Ltd. vs. DCIT (ITA No. 1503/Mds/2012) (Chennai Tribunal), CIT vs. Oriental Structural Engineers (P.) Ltd. (35 taxmann.com 210) (2013) (Delhi HC), CCI Ltd. vs. JCIT (250) CTR 291) (Karnataka HC), CIT vs. Delite Enterprises (ITA No. 110 of 2009 (Bombay HC), CIT vs. Shivam Motors (P.) Ltd. (ITA No. 88 of 2014) (All HC) (2014). It was further submitted that section 14A applies only when expenditure is actually incurred and there are numerous judicial decision in favour of assessee's Bank viz. CIT vs. Central Bank of India 264 ITR 522(Bom), CIT vs. General Insurance Corpn. Of India 254 ITR 203(Bom), Eicher Ltd. (101 TTJ 369) (Del), Dhanlakshmi Bank Ltd. vs. ACIT 12 SOT 625 (Cochin), CIT vs. Hero Cycles Ltd. 323 ITR 518) (Punjab & Haryana High Court). The ld. AR further argued that as per guidelines laid down by Reserve Bank of India, the bank has to invest interest free securities to maintain Statutory Liquidity Ratio (SLR). The rate of return on tax free deployment of funds lower in view of the tax exemption available. The Borrowings and interest expenses incurred in the normal course of bank....
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.... part of this order, we have enumerated in some detail, the various propositions which have been raised by the assessee in the context of the disallowance under section 14A of the Act which require specific determination by the AO. Therefore, following the earlier precedent, the matter relating to section 14A is remanded back to the file of AO, with the directions to allow the assessee an opportunity to make submissions, and the AO shall pass a speaking order giving determination on each of the propositions as per law. Thus, with these directions, the matter is restored back to the file of AO to adjudicate afresh as per law. Hence, this ground of appeal is allowed for statistical purpose." 12. On appraisal of the above mentioned finding, we set aside the finding of the CIT(A) on this issue and direct the AO to decide the matter of controversy afresh in view of the observation made by Hon'ble ITAT in the assessee's own case for the A.Y. 1999-2000 (supra). Accordingly, this issue is decided in favour of the assessee against the revenue. ISSUE No. 5 13. Under this issue the assessee has challenged the disallowance of depreciation of Rs. 168,81,45,689/- on leased asset....
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....k and taken back on lease for a period of 84 months against the lease rental payable at monthly instalment. The Assessing Officer held that the transaction is in the nature of loan or financial assistance provided to the Konkan Railway Corporation Ltd. (KRCL) by the assessee Bank. The transaction has been given the shape of lease transaction only in order to enable the bank to claim depreciation and reduce its taxable income. Accordingly, the AO held that the sale and lease back transaction is in the nature of financial transaction, therefore, the claim of depreciation was disallowed. On appeal, the CIT(A) confirm the action of the AO and held that the so-called lease agreement is only a finance lease on which the depreciation can be allowed to a person who vests the dominion over the property/asset, who is entitled to use it in his own right and using the same for the purpose of his business or profession. The CIT(A) has observed that in the present case the lessee retained the asset in its own dominion at the exclusion of others including the assessee because the lessee has constructed the equipments and uses it as integral part of railway system. In order to get finance KRCL mad....
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.... the Equipment inclusive of levies on important of the Equipment, Customs Duty, Central Excise Duty, Sales Tax, Additional Tax, Surcharge on Sales Tax, Interest Tax, where applicable, Turnover Tax, where payable and all other costs and expenses, as the case may be such as Freight, Octroi, Entry Tax, Erection and Installation \Charges, Commissioning Charges, Testing Charges paid or payable in respect of the Equipment or value assessed by the valuers as per clause 2.2. Below whichever is lower. In case the Lessee proposes to avail MODVAT on the specified Excise Duty paid in terms of the Central Excise Rules, 1944, of which due intimation will be given by the Lessee to the Lessor, the acquisition cost will not include Excise duty payable on the equipment. 1.6 The Lessee hereby takes on lease the Equipment for the Fixed period from the Commencement Date as hereinafter referred to subject to the terms, conditions, covenants and stipulations contained herein and in the Schedules hereto. The Fixed period or the primary period of the Lease as defined in Part II of the First Schedule hereto is noncancellable by the Lessee and/or the Lessor except as provided in Clause 13 hereof. The fixed p....
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....essor of any change in the Lessee's address and upon request by the Lessor promptly inform the Lessor of the whereabouts of the Equipment: 8.4 not do or omit to do any act which may result in seizure and/or confiscation of the Equipment by the Central or State Government or Local Authority or any Public Officer or Authority under any law for the time being in force. 8.5 not sell, assign, sub-let, pledge, mortgage, charge, encumber, or part with possession of or otherwise deal with the Equipment or any interest therein nor create or allow to be created any lien on the Equipment whether for repairs or otherwise and in the event of any breach of this sub-clause by the Lessee, the Lessor shall be entitled to call upon the Lessee to have the lien or charge or other encumbrance lifted at its cost and in the event of the Lessee failing to do so within a reasonable time, the Lessor shall be entitled (but shall not be bound) to pay to any third party such sum as is necessary to procure the release of the Equipment from any lien charge or encumbrance and shall be entitled to recover from the Lessee forthwith all such expenses as might have been incurred for such release: 8.6 not....
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....r on account of customs duty or excise duties or any other related and consequential taxes or charges levied or leviable on this transaction now or hereafter as also due to any increase in the purchase price of the Equipment covered by this Agreement on account of purchase tax and/or any other tax or imposition or due to tax on the right to use goods as may be applicable to the Equipment the Acquisition Cost of the Equipment stands increased, then the Lessor reserves the right to increase the Lease rentals proportionate thereto and on such notification by the Lessor to the Lessee, the Lease Rentals shall correspondingly stand increased from the date specified by the Lessor in such notification. 12. Events of Default: An event of default shall occur hereunder, if the Lessee 12.4 without the Lessor's consent, sells, transfers, or attempts to sell or pledge, parts with possession or sub-lets or charges or encumbers or creates any lien on the Equipment or any item of the Equipment is endangered in the opinion of the Lessor or the interest of the Lessor is jeopardised: 13. Termination in the even of default: 13.2 On the termination of this Agreement the Lessor shall with....
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....nation of the AgreementUpon the termination of this Agreement unless the Lessee has elected to renew the lease for a further fixed period or secondary period the Lessor shall as the absolute owner of the Equipment be at liberty to sell any or all of the Equipment at a public or private sale or otherwise dispose of, hold, use, operates, lease to others or keep idle such Equipment, all free and clear of any rights of the lessee and without any duty to account to the Lessee for such action or inaction or with respect to any proceeds thereto and if such Equipment is sold the price obtained upon such sale shall not be questioned or challenged by the Lessee more shall the Lessee question or dispute the exercise or non-exercise by the Lessor of any one or more of the rights and remedies as set out in Clause 13 hereinabove. 16. Assignment: 16.1 The Lessor may hypothecate the Equipment owned by it and leased out hereunder in favour of any bank, Financial Institution or any other Institution whatsoever as and by way of security for the financial assistance arranged therefore by the Lessor for the acquisition of such Equipment. The Lessor may assign to any person any of its rights under th....
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....o anybody else as it is not possible to use only a particular stretch of railway track without connecting or being a part of the entire network. Thus, the terms and conditions as heavily relied upon Ld. AR would not help the case of the assessee to establish that the asset in question could actually be taken in possession by the assessee. Therefore, the assessee cannot exercise the real and actual ownership over the asset keeping in view the facts and circumstances and nature of the asset in question. The Special Bench of this Tribunal in case of IndusInd Bank Ltd. (supra) by following the decision of Hon'ble Supreme Court in case of Asea Brown Boveri Ltd. Vs Industrial Finance Corporation of India (IFCI) 154 Taxman 512 as well decision in case of Association of Lease and Financing Service Company Vs Union of India (supra) has enumerated various features which make distinction between operating lease and finance lease in para 5.20 as under: "5.20 In view of the fact that the Id. AR has lodged a strong claim to consider the present agreement as that of operating and not a finance lease, it is imperative to understand the distinction between the two as under :- a. In the case ....
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....ease out the same asset over and over again. Though no single lease recovers the principal amount plus interest component of the lessor but all the leases taken together make it a full payout. That is why the non payout lease is peculiar to operating lease." 22. The Special Bench then analysed the various factors of distinction between operating lease and finance lease in para 5.21- 5.23 as under "5.21 From the above points of distinction between operating lease and finance lease, the salient features of operating lease have become glaring. Now let us ascertain as to whether the above clauses, claimed by the id. AR as amply proving it to be a case of operating lease agreement, do in fact prove it so. IA an earlier para we have observed that this lease agreement fully satisfies all the characteristics of finance lease. The position which, therefore, emerges is that some clauses of the agreement tend to give impression of this being an operating lease whereas the others largely indicate it to be a finance lease. How to resolve the conflict? In order to decide as to whether the instant lease agreement be characterized as operating or finance lease, we need to take shelter of the....
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....he costs regarding loss and obsolences, repairs, maintenance, insurance etc. are to be born by the lessee. Thus the risk and reward of ownership of the asset vested with the lessee and therefore for all practical purposes the ownership of the asset was vested with the lessee and not with the assessee. The terms of the agreement are designed in a manner so that in any eventuality the assessee would recover the investment (cost of asset) with interest and not the asset in question. As discussed in the foregoing paras the title over the asset as per the lease agreement is only for securing the financial interest of the assessee and not intended to really take the asset in its possession on the expiry of lease term or on the termination of the lease agreement. Therefore all the features and attributes of finance lease as discussed by the Special Bench in case of IndusInd Bank do exist in the case of the assessee. 24. Apart from the terms and conditions as stipulated in the lease agreement one more important aspect which is very relevant in deciding the issue is that as per the Banking Regulation Act, 1949, a Banking company is not permitted to engage in the activity of leasing of asset....
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....ing any property which may come into the possession of the company in satisfaction or part satisfaction of any of its claims; (g) acquiring and holding and generally dealing with any property or any right, title or interest in any such property which may form the security or part of the security for any loans or advances or which may be connected with any such security; (h) undertaking and executing trusts (i) undertaking the administration of estates as executor, trustee or otherwise; (j) establishing and supporting or aiding in the establishment and support of associations, institutions, funds, trusts and conveniences calculated to benefit employees or exemployees of the company or the dependents or connections of such persons; granting pensions and allowances and making payments towards insurance; subscribing to or guaranteeing moneys for charitable or benevolent objects or for any exhibition or for any public, general or useful object; (k) the acquisition, construction, maintenance and alteration of any building or works necessary or convenient for the purposes of the company; (l) selling, improving, managing, developing, exchanging, leasing, mortgaging, disposing of or turning....
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....ance charge (i.e. interest charge) and a charge towards recovery of the cost of the asset. The interest component alone should be taken to the income account. The component representing the replacement cost of the asset should be carried to the balance sheet in the form of a provision for depreciation. (vi) As a prudent measure, full depreciation should be provided for during the primary lease period of the asset. The period of lease should not normally exceed five years. In exceptional cases, lease period not exceeding 7 years may be fixed in respect of lease transactions covering assets of Rs. 1 crore and above, as the recovery of cost may not be possible in a period of 5 years." 5.25 On perusal of the above paras of the above circular it becomes patent that the equipment leasing activity should be treated by banks "on par with loans and advances". The further contents of para 1 (ii) which provides that the guidelines on income recognition, asset classification and provisioning would also be applicable to them, make it clear that the activity of equipment leasing should be considered as an act of advancing loans and advances. It is so for the reason that the guidelines on inco....
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....e with the RBI Circular which states that in case of equipment leasing the entire lease rental should not be treated as bank's income but only that component of such lease rental which represents finance charges i.e. interest should be recognized as income alone. 5.27 We, therefore, approve the view taken by the authorities below in coming to the conclusion that the lease agreement under consideration is that of finance lease and not operating lease." 26. As it is clear from the circular that the banks undertaking equipment leasing departmentally should follow prudential accounting system and only the interest charge component should be recognised as income and the recovery of cost of asset should be carried to balance sheet on the form of provision of depreciation. Therefore under the circular the transaction of equipment lease is treated at par with the loan transaction and accordingly only the interest component of the receipt is recognised as income. Since it is not permitted to recognise the entire receipt being lease rentals as income the assessee has also recognised only interest component of the receipt of the lease rental as income in the profit and loss account ....
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....98, 1998-99 & 1999-2000. Nothing came into noticed that the finding has been changed and varied. The Ld. Representative of the assessee has argued that the appeal in this regard for the A.Y. 1996-97 has been admitted before the Hon'ble Bombay High Court. Nothing came into the notice till the date. Accordingly, we are of the view that there is no change in the decision, hence, by following the earlier orders of the Hon'ble ITAT mentioned above, this issue is decided against the assessee. ISSUE No. 6 15. Under this issue the assessee has challenged the disallowance of Rs. 125,96,48,926/- being paid to SBI Mutual Fund in respect of shortfall arising on redemption of Magnum Triple Scheme 1991. The Ld. Representative of the assessee has argued that this issue has been covered by the decision of Hon'ble ITAT in the assessee's own case and by the decision of the Hon'ble High Court of Karnataka in the case of Canara Bank Vs. ACIT (2014) 228 Taxman 212 (Kar). However, on the other hand, the Ld. Representative of the Department has refuted the said contention. Before going further, we deem it necessary to advert the finding of the Hon'ble ITAT 3823/M/2017 dated ....
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....nd many other acts incidental to the carrying on of a business. However wide the meaning of the expression may be, its limits are implicit in it. The purpose shall be for the purpose of the business, that is to say. the expenditure incurred shall be for the carrying on of the business and the assessee shall incur it in his capacity as a person carrying on the business. 7. Further. Hon'ble Supreme Court in the case of Sassoon J. David & Co. Pvt. Ltd. (supra) has laid down the following tests for treating an expenditure as wholly and exclusively for the business purposes: "it has to be observed here that the expression "wholly and exclusively" used in section 10(2)(xv) of the Act does not mean "necessarily". Ordinarily it is for the assessee to decide whether any expenditure should be incurred in the course of his or its business. Such expenditure may be incurred voluntarily and without any necessity and if it is incurred for promoting the business and to earn profits, the assessee can claim deduction under section 10(2)(xv) of the Act even though there was no compelling necessity to incur such expenditure. It is relevant to refer at this stage to the legislative history of....
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..... Under this issue the assessee has challenged the disallowance of unearned income on non-performing assets as envisaged by Section 43D. This issue has already been remanded before the AO by Hon'ble ITAT in the assessee's own case for the A.Y. 1999-2000 bearing ITA. No. 4736/M/2010 & 4598/M/2010 dated 31.01.2018. The relevant finding is hereby reproduced as under.:- "19. Ground No.6 relates to unearned interest on doubtful advances as per section 43D not allowed as a deduction. The ld. AR of the assessee argued that similar ground of appeal was restored back by the Tribunal to the file of AO assessee's own case for AY 1997-98 in its order dated 29.04.2016. The ld. DR for the Revenue expressed his no objection, if, this ground of appeal is also restored back to the file of AO to decide the same in accordance with the direction of Tribunal in order dated 29.04.2016 in appeal for AY1997-98. 20. We have considered the submission of the parties and perused the orders of authorities below. We have noted that similar ground of appeal was restored back to the file of AO by the Tribunal with the following direction: 7. Ground No.7 deals with un-earned interest on doubtful ....
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....n the assessee's own case for the A.Y. 1999-2000. Accordingly, this issue is decided in favour of the assessee against the revenue. ISSUE No. 8 & Additional Ground No. 1 19. Under this issue the assessee has challenged the non-granting of deduction u/s 36(1)(vii) in respect of non-rural advances written-off as bad debts. This issue has been adjudicated by Hon'ble ITAT in the assessee's own case for the A.Y. 1999-2000 bearing ITA. No. 4736/M/2010 & 4598/M/2010 dated 31.01.2018. The relevant finding has been given in para no. 34 which is hereby reproduced as under.:- "34. Additional Ground No.1 relates to write- off of bad debts u/s. 36(1)(vii), Additional Ground No.2 relates to recovered of baddebts written off should not be liable to tax u/s 41(4) and Additional Ground No. 3 relates to income earned from foreign branches should not be liable to tax in India. The ld. AR of the assessee argued that all additional grounds of appeal are purely legal in nature, the failure to raise these additional ground initially were neither intentional nor deliberate and prayed for consideration of all additional grounds of appeal. It was further argued that additional ground no....
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....bmission of the parties and perused the orders of authorities below. We have seen the order of tribunal for AY 1997-98 & 1998-99 in ITA No. 3823 & 3824/Mum/2005 dated 29.04.2016 wherein similar ground of appeal was allowed by the Tribunal holding as under: 9. Last Ground deals with disallowance of contribution to SBI Retired Employees Medical Fund. During the year under consideration the assessee had contributed Rs. 20 crores towards the fund. The AO found that the assessee had in the return of income mentioned that it was a welfare measure and should be allowed as a deduction from the computation of total income even though the assessee itself had added back the sum to its income for the year under consideration. The AO did not allow the claim made by the assessee. 9.1. Before the FAA, it was stated that the bank had been contribution every year certain amt out of its tax profits, towards contribution to SBI Employees medical Fund. The FAA held that as per the provisions of Section 40A(9) of the Act no deduction was allowable in respect of any sum paid by the assessee as an employer towards setting up or formation of or as contribution to any fund trust except where such sum....
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....ntioned finding, we noticed that the CIT(A) has decided the issue on the basis of the finding of the Hon'ble ITAT in the assessee's own case for the A.Y. 1999-2000 in which the claim of the assessee has been allowed. This issue is decided in favour of the assessee on the basis of the earlier decision of the Hon'ble ITAT in the assessee's own case for the A.Y. 1997-98 & 1998-99. Nothing came into noticed that the finding has been changed and varied. No distinguishable material has been placed on record. Accordingly and by relying upon the decision of the Hon'ble ITAT in the assessee's own case for the A.Y. 1999-2000, we decide this issue in favour of the assessee against the revenue. ISSUE No. 10 23. Under this issue the assessee has challenged the disallowance of provisions for bad debts and doubtful debts u/s 36(1)(viia). This issue has already been adjudicated by Hon'ble ITAT in the assessee's own case for the A.Y.1999-2000. The relevant finding is hereby reproduced as under.:- "28. Ground No.9 relates to entire provision for bad and doubtful debts to be allowed u/s. 36(1)(viia) of Rs. 1441,42,98,921/-. The ld. AR of the assessee argued th....
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....ction of the AO and held that the entire amount cannot be allowed as deduction merely on the basis of RBI guidelines. Before us the Ld. AR of the assessee has relied upon the decision of Chennai Bench of this Tribunal in case of Overseas Sanmar Financial Ltd. Vs JCIT 86 ITD 602. On the other hand, the Ld. DR has relied upon the order of the authorities below and submitted that the provisions of statute will prevail over the RBI guidelines for the purpose of deduction u/s 36(1)(viia). 33. We have considered the rival submissions as well as relevant material on record. There is no dispute regarding the claim allowed by the AO is proper as per the provisions of section 36(1)(viia). When the allowable claim has been accepted by the AO under the provision of section 36(1)(viia) then merely the provision made on the basis of RBI guidelines does not become allowable for deduction in contravention of the provision of section 36(1)(viia). It is pertinent to note that when the claim of deduction specifically provided u/s 36(1)(viia) then the same cannot be allowed by applying any other provision. Accordingly, we do not find any merit or substance in the claim of the assessee. Hence dismis....
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....rther verification. Therefore, matter is restored back to the file of AO for fresh adjudication, who would decide the case after hearing the assessee. Ground No.8 stands decided in favour of the assessee in part. 33. Thus, considering the decision of Tribunal in assessee's own case for AY 1998-99, wherein similar ground of appeal has been restored to the file of AO, hence, this ground of appeal is also restored to file of AO to decide afresh in accordance with law and considering the direction in order dated 29.04.2016 in appeal for AY 1997-98. Hence, this ground of appeal is allowed for statistical purpose." 26. On appraisal of the above mentioned finding, we noticed that this issue has been decided on the basis of the decision in the assessee's own case for the A.Y.1997-98 & 1998-99. The issue has restored before the AO to decide the matter of controversy afresh by following the certain directions. In view of the decision of Hon'ble ITAT in the assessee's own case for the A.Y. 1999-2000, we set aside the finding of the CIT(A) on this issue and restored the issue before the AO to decide the matter of controversy afresh by following the direction given in the ....
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....e case of Vijaya Bank Vs. CIT (2010) 323 ITR 166 2. Recovery of bad-debts written off should not be liable to tax u/s 41(4) Covered by the decision of the Bangalore Tribunal in the case of State Bank of India Mysore Vs. DCIT (2009) 33 SOT 7 (BANG.) 3. Income earned from foreign branches should not be liable to tax in India Covered in favour of the appellant by the decision of the Mumbai bench of Tribunal in the case of Bank of India Vs. DCIT (ITA No. 2781/Mum/2011) 4. The Tribunal has disposed of the issue in para 37 of the order which reads as under:- "In additional Ground no. 1-3 are raised first time by the assessee and involves legal issue, therefore as prayer by the assessee the same are remitted to the record of the Assessing Officer for examination and adjudication as per law after giving a opportunity of hearing to the assessee". 5. It is apparent from the finding of the Tribunal in para 37 (Supra) that the decisions relied upon by the Ld. AR have escaped consideration, accordingly we are of the view that to that extent there is an apparent error in the impugn order of the Tribunal which requires to be rectified u/s 254(2) of the Income Tax Act. Since these issues wer....
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....ointed out that though these grounds were raised for the first time before the Tribunal and the Tribunal after considering the fact that these are purely legal issues have admitted these grounds for adjudication on merit. The Ld. Counsel has further submitted that in support of these additional grounds the assessee has relied upon the various decisions whereby these issues were covered in favour of the assessee. However in para 37 of the impugned order the decision relied upon by the assessee do not find mention. Thus the Ld. Counsel has submitted that instead of remitting the issue to the AO for fresh adjudication the Tribunal should also consider the decisions relied upon by the assessee. Hence it is urged that the suitable clarification/modification in the impugned order of the Tribunal in para 37 may be made. 3. On the other hand Ld. DR has submitted that there is no apparent error in the impugned order of the Tribunal regarding the additional grounds raised by the assessee which were remitted to the record of the AO for examination and adjudication as per law. 4. Having considered the rival submissions and careful perusal of the records, we note that the assessee has advanced ....
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....ns relied upon by the assessee as well as after giving opportunity of hearing to the assessee." 30. On appraisal of the above mentioned finding, we noticed that this issue has been decided on the basis of the decision in the assessee's own case for the A.Y 1996-97 bearing M.A. No.371/M/2014. Accordingly, we decide this and restore this issue before the AO to decide the matter of controversy afresh by giving an opportunity of being heard to the assessee in accordance with law on similar lines. ITA. No. 6822/M/2010 31. The facts of the present case are quite similar to the fact of the case as narrated above while deciding the ITA. No.6482/M/2010, therefore, there is no need to repeat the same. 32. The revenue has raised the following grounds.:- I. The order of the CIT(A) is opposed to law and facts of the case. 2(a) On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in deleting the disallowances of Rs. 82.71 lakhs incurred by the assessee on reservation of seats in the schools for the children of the bank officers without appreciating that the amount was not incurred wholly and exclusively for the purpose of its business. 2(b) ....
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....ng the facts of the case and respectfully following the decision of jurisdictional HC and decision of my learned predecessor, the addition made is deleted." 35. On appraisal of the above mentioned finding, we noticed that the CIT(A) has decided the issue on the basis of the decision of the CIT(A) in favour of the appellant in its own case for the A.Ys. 1997- 98 & 1998-99. The said order was followed by the CIT(A) for the A.Y. 1999-2000. Subsequently, the Hon'ble ITAT has also decided the issue for the A.Y. 1992-93 to 1995-96. Since the matter of controversy has already adjudicated by the Hon'ble ITAT in the assessee's own case for the A.Y. 1992-93 & 1995-96 in the assessee's favour and there is no change of the decision, therefore, we are of the view that the CIT(A) has rightly and correctly decided the issue in favour of the assessee against the revenue. Accordingly, these issues are decided in favour of the assessee against the revenue. ISSUE No. 3(A) & 3(B) 36. Under these issues the revenue has challenged the deletion of addition made by the AO on account of interest on securities on accrual basis as the assessee followed mercantile system of accounting....