TaxTMI 
TaxTMI 
2022 (4) TMI 1057
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....per the original assessment order. Ld. Pr.CIT, Mumbai -1 perused the assessment records and observed that assessee had claimed deduction on account of provision of bad debts u/s. 36(1)(viia) of the Act to the tune of Rs..17,43,85,411/- from A.Y.2007-08 to A.Y.2010-11. Assessee also claimed bad debts of Rs..1,65,53,139/- during those Assessment Years. According to him the balance for provision for doubtful debts (claimed u/s. 36(1)(viia) as on 01.04.2010 should be Rs..15,78,32,092/-. He observed that during the year under consideration, assessee had written off total bad debts of Rs..56,49,26,145/- and claimed deduction of Rs..55,54,07,323/- u/s.36(1)(viia) of the Act after setting off Rs..95,18,822/- against the provision of bad debts credited u/s. 36(1)(viia) of the Act. He further observed that it is clear from the above observations that the assessee was having opening balance of Rs..15,78,32,092/- out of which only Rs..95,18,822/- has been set off. The assessee has not set off Rs..14,83,13,270/- of bad debts against the provision for bad debts. Therefore, he observed that assessee is not eligible to claim bad debts of Rs..14,83,13,270/- which was erroneously allowed by the Asse....
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....case and I do not find any force in the contentions made on behalf of the assessee which is satisfactorily relevant to the issue under consideration. The reasons for the same are as under: 1. In this regard it is stated that though the bad debts may have been classified as NPA before 01.04.2006 (i.e. applicability of section 36(1)(viia) to co-operative banks) but the actual write off was claimed during A.Y.2011-12 {many years after availing the benefit of Provision for bad and doubtful debts reserve u/s.36(1)(viia)}. There is no provision in the Act to say that the opening balance created u/s.36(1)(viia) has to be adjusted only if the debts have been classified after the application of provisions of Section 36(1)(viia). The proviso below section 36(1)(viia) only stated that the opening balance has to be restricted to the amount by which such bad debts written off exceeds the credit balance in the provision for bad and doubtful debts account. 2. Alternatively, prior to 01.04.2006, co-operative banks were fully exempt from tax under the proviso of section 80P. Hence, there was no question of considering the bad debts during the computation of total income. Thus, the....
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....me Tax Appellate Tribunal dated 12/09/2017 in the case of City Cooperative Bank Ltd., in ITA no. 2884/Mum/2015. 1.6 The learned Principal Commissioner of Income-tax failed to appreciate that the said decision of the jurisdictional Mumbai Bench of the Income Tax Appellate Tribunal dated 12/09/2017 in the case of City Cooperative Bank Ltd., in ITA no. 2884/Mum/2015 has reached the finality and is binding on him. 2. Order u/s. 263 dated 24/03/2021 is illegal and invalid. 2.1 The Learned Principal Commissioner of Income-tax failed to appreciate that the notice u/s. 263 dated 02/03/2021 being illegal and invalid, the consequent order u/s. 263 dated 24/03/2021 is also illegal and invalid. 2.2 The learned Principal Commissioner of Income-tax failed to appreciate that the order u/s. 263 dated 24/03/2021 is illegal and invalid being without authority in law and without jurisdiction. 2.3 The learned Principal Commissioner of Income-tax failed to appreciate that the order u/s. 263 dated 24/03/2021 is illegal and invalid being barred by limitation. 2.4 The learned Principal Commissioner of Income-tax failed to appreciate that the claim for ....
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....007-08, 2008-09 and 2009-10 at Rs..7,96,787/-,Rs.. 5,029/- and Rs..2,75,628/- respectively. It is a fact that up to A.Y. 2006-07 the income from banking business was fully allowed in the case of the assessee under section 80P of the Income Tax Act. Subsequently by Finance Act, 2006 by insertion of sub-section (4) in section 80P the assessee was not entitled for deduction under section 80P from A.Y. 2007-08. The deduction under section 36(1)(vii) is available in respect of bad debts written off subject to the fulfilment of the conditions specified under section 36(2). Section 36(1)(viia) provides for the treatment of provisions for bad and doubtful debts of an amount not exceeding 7.5% of the total income (computed before making any deduction under this clause and Chapter VIA) and an amount not exceeding 10% of the aggregate average advances made by the rural branches of such banks. The provisions of Section 36(1)(vii) and section 36(1)(viia) are distinct and independent. The provisions of Section 36(1)(viia) are applicable w.e.f. A.Y. 2007-08 to cooperative bank also. Therefore any provision allowed in A.Y. 2007-08 onwards in the case of a cooperative bank under clause (viia) will ....