TaxTMI 
TaxTMI 
2022 (12) TMI 242
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....1)(viia) of the Act to Rs. 143,07,19,755/- as against the claim of Rs. 1083,06,95,013/- made by the appellant. 2.1. The learned CIT(A) erred in holding that the deduction should be restricted to the provision made in the books accounts for rural advances. 2.2. The learned CIT(A) failed to appreciate that in order to claim deduction u/s. 36(1)(viia), there is no requirement u/s. 36(1)(viia) that the provision should relate to rural advances. 2.3. The learned CIT(A) failed to appreciate the fact the entire provision made has to be considered and not the provision relating to rural advances only be considered. 2.4. The learned CIT(A) failed to appreciate the fact that the Hon'ble Supreme Court in the case of Catholic Syrian Bank [2012] 343 ITR 270 (SC) did not lay down the law that the deduction should be allowed by only considering the provision for rural advances in the books. 2.5. The learned CIT(A) erred in not following the order of the Hon'ble ITAT in the app Bank's own case for the earlier Assessment years. 3. In the facts and circumstances of the case and in law, the learned CIT(A) has erred in confirming the di....
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....allenging section 36(1)(viia) disallowance pertaining to bad and doubtful debts as the same is found to be a recurring issue between the parties. This tribunal's latest co-ordinate bench order in assessment year 2010-11 appears to have restored the instant issue to the assessing authority as follows: "3.3 Both sides heard. Orders of the authorities below perused. In ground No. 1 of appeal the assessee has assailed the findings of Commissioner of Income Tax (Appeals) in disallowing assessee's claim u/s. 36(1)(vii) of the Act on account of write off of debts by non rural branches of assessee Bank. We observe that identical issue had come up before the Tribunal in assessee's own case in ITA No. 1505/PN/2008 and in ITA Nos. 1135 to 1138/PN/2013 (supra). The relevant extract of the findings of Co-ordinate Bench on the issue are reproduced here-in-under: "28. By way of Ground of Appeal No. 3, assessee has raised a claim of deduction of Rs. 68,06,15,000/- u/s. 36(1)(vii) of the Act on account of write off on debts by the non-rural branches of the assessee bank. The learned counsel for the assessee explained that the said claim was raised by way of an Addition....
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....ower authorities are of the view that once the assessee follows mercantile system of accounting, it ought to have claimed and recognized the impugned expenditure in the year of accrual than that of the actual expenditure. The assessee's case on the other hand is the impugned expenditure item pertaining to prior period stood crystallized in the relevant previous year only. Both the learned representatives also invited our attention to the Assessing Officer's detailed discussion in his assessment order dated 28.12.2017 disallowing the assessee's claim. 6. We find no force in the Revenue's supportive arguments as there is no material in principle which has been rejected by the Assessing Officer while dealing with the assessee's crystallization plea. That being the case, we allow the assessee's impugned claim in principle and direct the Assessing Officer to examine its supportive evidence of crystallization of the corresponding expenditure items in the relevant previous year by quoting CIT Vs. Indian Petrochemicals Corporation Ltd. 2016 (9) TMI 110 - Gujarat High Court and case law CIT vs. Adani Enterprises Ltd. Tax Appeal 566/2016 (Guj) also holds that such ....
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.... of the assessee is that it is not Banking Company. The Ld. Counsel for the assessee also submitted that this issue was not raised before the Assessing Authority. However, the Ld. Counsel submitted that this matter came up for adjudication before the Ld. CIT(Appeals) who rejected the arguments of the assessee merely following of provision of Explanation 3 of the said section. The Explanation 3 is actually a sunset clause ending on 31.03.2012 vide Finance Act, 2012. The Ld. CIT(Appeals) ignoring the submissions of the assessee applied the said Explanation to the case of the assessee without giving into the essential core fact whether the assessee is Banking Company or Corporation or otherwise. 20.1 Before us, the Ld. Counsel for the assessee also submitted that they are not Banking Company. He referred to the events of nationalization of Banks that took place in the year 1970 and relevant Acts i.e. Banking Companies (acquisition and transfer of undertakings) Act 1970. 21. It is the case of the Revenue on this proviso that the assessee falls under the Banking Company and therefore, proviso to section 115JB of the Act still applicable to the Banking Company like the ....
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....pportunity of hearing to the assessee. Thus, ground No. 5 raised in appeal by the assessee is allowed for statistical purposes. 25. Ground No. 6 is an alternative ground to Ground No. 5. Since we have remanded the issue raised in ground No. 5, accordingly, the issue raised in ground No. 6 is also remanded to the file of the Ld. CIT(Appeals) with similar direction as given in ground No. 5. The Ld. CIT(Appeals) is also directed to pass a speaking order considering the arguments raised before him. Thus, ground No. 6 raised in appeal by the assessee is allowed for statistical purposes." 10. Both the parties are fair enough in not pinpointing any distinction on facts or law qua the instant issue of applicability of section 115JB in assessee's case. There is further hardly any dispute as we have restored the assessee's foregoing second substantive grievance of prior period expenditure back to the Assessing Officer. Faced with the situation, we set aside the instant MAT issue as well back to the Assessing Officer for his afresh adjudication in light of CIT(A)'s findings in the preceding assessment year (s) 2013-14 and 2014-15, as the case may be, as per law. Ordere....
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.... years. The Co-ordinate Bench in assessee's own case for assessment year 2010-11 in ITA No. 1370/PUN/2014 (supra) has decided this issue in favour of the assessee by placing reliance on the order of Tribunal in ITA No. 1505/PN/2008 and now the same has been upheld by the Hon'ble Bombay High Court in Income Tax Appeal No. 920 of 2015. For the sake of completeness the relevant extract of the findings of Tribunal in ITA No. 1370/PUN/2014 (supra) on this issue are reproduced here-in-below: "5.3 Both sides heard on the issue of disallowance of claim of loss in respect of securities held under HTM category. Both sides are unanimous in stating that the present issue was subject matter of appeal before the Tribunal in ITA No. 1505/PN/2008 and in ITA Nos. 1135 to 1138/PN/2013 (supra). The Co-ordinate Bench adjudicated the issue by observing as under: "20. In the background of the aforesaid legal position, a premise which can be drawn is that for the purposes of valuation of the closing stock it is permissible for the assessee to value it at the cost or market value, whichever is lower. In-fact, the Hon'ble Supreme Court in the case of Chainrup Sampatram vs. CIT....
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....f the Revenue has been assailed by the learned Counsel for the assessee bank He has furnished a statement showing net profit on sale of HTM Securities as per the Balance Sheet for the various assessment years, viz. 2006-07 to 2009-10. On this basis, it is sought to be contended that the HTM category securities are also viewed as "stock-in-trade" by the assessee-bank In our opinion, the plea of the learned CIT-DR is quite untenable primarily because the very nature of banking activities allowed as per the Banking Regulation Act, 1949 are in the sphere of business/trade activities; and, accordingly the recognition of investments in HTM category as "stock-in-trade" is not dependent on the frequency of their sale/purchase carried out by the assessee-bank. 21. In view of the aforesaid discussion, we, therefore, conclude by holding that in the present case the method of valuation of the closing stock adopted by the assessee i.e. cost or market value, whichever is lower is fair and proper and the income-tax authorities have erred in not accepting the same. The orders of the authorities below on this aspect are hereby reversed." 5.4 The Ld. AR has further drawn our attent....