TaxTMI 
TaxTMI 
2022 (5) TMI 624
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....ed that this delay has occurred inadvertently, as the grounds of appeal filed by the assessee before the CIT(A) are not readily available in this office and the same were obtained from CIT(A)-11, Hyderabad. Thus, the delay of 27 days in filing the appeal has occurred which is neither deliberate nor intentional and it was due to the circumstances beyond the control of the appellant........ ..........." 3. On perusal of the contents of the affidavit (supra), we are of the considered opinion that the delay of 27 days in filing appeal before the Tribunal is neither deliberate nor intentional and therefore we hereby condone the delay and proceed to adjudicate the appeal on merits. 4. The Revenue has raised the following grounds of appeal before the Tribunal. "1. The order of the Ld. CIT(A) is erroneous on facts and in law. 2. The Ld. CIT(A) erred in deleting the addition of Rs. 2,93,452/- made by the AO on account of disallowance of provision in excess of seven and one half percent of the income as provided in section 36(1)(viia). 3. The Ld. CIT(A) erred in not appreciating the fact that the assessee has not submitted any evidence whatsoever to ....
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....urities Rs. 5,66,869/-. 6. Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the CIT(A)-11, Hyderabad. The Ld. CIT(A) considering the submissions made by the assessee's Representative allowed the claim for provisions of bad and doubtful debts as per First proviso to sub-clause (a) of section 36(1)(viia) of the Act. The Ld. CIT(A) also allowed the loss on sale of Government securities in accordance with the guidelines issued by the RBI. Aggrieved by the order of the Ld. CIT(A), the Revenue is in appeal before the Tribunal. 7. The Ld. DR supporting the order of the Ld. AO argued that as per the provisions of section 36(1)(viia)(a) of the Act as claimed by the assessee is in excess of 7½ % of the income claimed and reported, and hence the excess deduction claimed should be disallowed. The Ld. DR also argued that the applicability of first proviso to sub-clause (a) of section 36(1)(viia) was not raised before the Assessing Officer. The Ld. DR also submitted that the assessee has not disclosed the sale and purchase of government securities in the P & L Account and hence the loss incurred under the sale of Government securities held as investments sho....
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....f income under the head "Profits and gains of business or profession." Explanation.-For the purposes of this sub-clause, "relevant assessment years" means the five consecutive assessment years commencing on or after the 1st day of April, 2000 and ending before the 1st day of April, 2005; 8.1. The Ld. AR argued that as per section 5 of the Banking Regulations Act, an Urban Cooperative Bank is also a non-Scheduled Bank and hence the First proviso is applicable for the assessee. The Ld. AR relied on the judgment in the case of ACIT vs. Chanasma Nagrik Sahakari Bank Ltd reported in (2018) 167 ITD 0151 (Ahmedabad) as well as the following the decisions: (i) The Kannur Dist. Coop. Bank Ltd vs. ACIT (ITA Nos.323 & 423/Coch/2010). (ii) ACIT vs. Jaipur Central Cooperative Bank Ltd (ITA No. 817/JP/2011). (iii) CIT vs. The Lord Krishna Bank Ltd reported in (2011) 339 ITR 0606) (Kerala High Court). (iv) M/s. Nagaur Urban Coop. Bank Limited vs. ACIT (240/Jodh/2013) (v) Karnataka Bank Ltd vs. ACIT reported in (2013) 356 ITR 0549) Karn.) 9. The Ld. AR also submitted a statement as below: Assessee claimed NPA at Rs.3,58,60....
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.... mentioned in sub clause (a) of section 36(1)(viia) of the Act whereas in the first proviso only a scheduled and non-scheduled bank is being referred in the Act. We therefore note that the term "Cooperative Bank" is specifically excluded in the first proviso to sub clause (a) of section 36(1)(viia) of the Act. Accordingly, the Ld. AO has rightly computed the deduction eligible U/s. 36(1)(viia) of the Act. We therefore uphold the order of the Ld. AO on this ground. 13. With respect to Grounds No. 5 to 7 on the loss incurred by the sale of Government Securities, we find merit in the arguments of the Ld. AR that such investments were classified as "Available for Sale" category. RBI categorises investments into three categories for both SLR and non-SLR categories as follows: (i) Held To Maturity (HTM) (ii) Available For Sale (AFS) (iii) Held For Trading (HFT) 14. Investments classified under HTM category need not be marked to market and are carried at acquisition cost unless there are more than the face value, in which case the premium should be amortized over the period remaining to maturity. In the case of HFT and AFS securities forcing stock-in-trade....