2023 (3) TMI 821

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.... law and on facts in making disallowance of Rs.91,200/- u/s 37(1) of the ITA, 1961 on account of advertisement expenses. 2. The learned AO erred in law and on facts in making adisallowanceand further learned CIT(A)-7 , erred in Confirming AO's action for disallowing Rs. 41,78,942/- u/s 36(l)(viia) of the ITA, 1961 in respect of provision for bad and doubtful debts. 3. The learned CIT(A)-7 and learned AO erred in law and on facts in not appreciating that while calculating allowance u/s 36(l)(viia) i.e. 7.5% of total income, there is no requisite to have rural advances with the appellant bank. 4. The learned CIT(A)-7 and learned AO erred in law and on facts in making disallowance of Rs.10,59,681/- on account of interest on deposits ....

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....urpose: Rs. 91.200/- 4.1 P & L a/c of the assessee, was debited on a/c of expenditure under the head Advertisement expenses" at Rs.91,200/-. On verification of such expenses and "advertisement given in the print media vis-a-vis business exigencies of such advertisement expenses, it is seen that the same is not for the purpose of business and thus, are not deductible u/s 37(1) of the Act. The details are given as under:   Date Particulars Amount 01 16.09.2013 Death condolence of Mr. Kalyanrao Gujar 79,200/- 02 04.03.2014 Death condolence of Mr. Rambhau Tupe/Shreerang Kadam 12,000/-     Total 91,200/- 4.2 On discussion with the AR of the assessee, he agreed that the business expediency of such expen....

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....axes him in accordance with that statement. If he can have no grievance, he can file no appeal. Therefore, it is imperative, if the assessee's case is that his statement has been wrongly recorded or that he made it under a mistaken belief of fact or law, that he should make an application for rectification to the authority who passed the order based upon the statement. Until rectification is made, an appeal is not competent." 7. It is observed that identical issue came up for hearing before the ITAT in ITA No.1204 to 1206/PUN/2017 for A.Y. 2011-12 to 2013-14 vide order dated 16.03.2020 held as under : "12. On hearing both the sides on this issue, we find that the order of CIT(A) is fair and reasonable. For the sake of completeness, p....

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....s wholly and exclusively for the purpose of the business. The ld.AR also could not rebut the fact that during the assessment proceedings, it was accepted by the ld.AR of the assessee that he is unable to substantiate and therefore agreed for the addition. In these facts and circumstances of the case, we are of the opinion that the expenditure of Rs.91,200/- incurred on advertisement was not wholly and exclusively for the purpose of the business of the assessee. Therefore, the AO has rightly disallowed the said expenditure, accordingly, ground no.1 of the assessee is dismissed. Ground No.2 & 3 Disallowance under section 36(1)(viia) :- 9. During the assessment proceedings, the ld.AO observed that assessee was not having any Rural Advances, ....

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....parting from the view taken by Pune Bench of Tribunal in assessee's own case relating to assessment year 2010-11, wherein the order is dated 29.05.2015 but decision of the Hon'ble High Court of Kerala on the issue is dated 03.04.2014 was neither relied upon nor brought to the knowledge of Tribunal and the issue was decided against assessee. The issue raised in the present appeal stands fully covered by the decision of the Hon'ble High Court of Kerala (supra) though not the jurisdictional High Court, but the only decision available on the said issue squarely binds the Tribunal and hence, applying the said ratio, we hold that the assessee is entitled to the claim of deduction under section 36(1)(viia) of the Act to the extent of 7.5% of total....