TaxTMI 
TaxTMI 
2022 (5) TMI 624
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....ds 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 show that the claim of the assessee is as per the RBI guidelines either during the re-asses....
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....he 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 should be considered as a capital loss only and not as business loss. The Ld. DR also referred to para 4.2 of the order of the Ld. CIT(A) stating that the trading ....
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....g 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.3,58,600 Towards Standard Assets - Rs.1,99,041 Balance Figure NPA - Rs.1,59,559 Total provision in P & L - Rs.3,58,600 5% of 56,42,827 = Rs.2,82,141 Claim to be restricted = Rs.1,59,559 AO Allowed = Rs. 65,138 Net Amount in dispute now = Rs. ....
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....he 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 of the bank, the depreciation/appreciation is to be aggregated scrip wise and only net depreciation, if any, is required to be provided for in the accounts. The above Instruction was issued by CBDT vide Instruction No.17/2008 dated 26/11/2008. The Hon'ble Mumbai High Court in the case of GIT vs. Bank of Baroda (2003) 262 ITR 334 held that the banks....