AI Drafter 
TaxTMI 
TaxTMI 
2023 (7) TMI 1500
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....8/-". 3. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the additions of non cash write back amounting to Rs. 19,35,46,838/-". 4. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made by the AO relating to interest expenses directly attributable to earning the income u/s. 10(23G) of the I.T. Act". 5. "On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in directing the AO to re-compute the exemption claimed on tax free interest u/s. 10(15) of the I.T. Act". 6. "On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in deleting the additions of depreciation on leased assets amounting to Rs. 232,25,76,303/- 7. "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in allowing the deduction u/s. 80M of the I.T. Act amounting to Rs. 156,34,12,743/- 8. "On the facts and in the circumstances of the case and in law, the "Ld. CIT(A) erred in deleting the notional interest taken for the purpose of determining the annual value u/s. 23(l)(a) of th....
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....ccording to the Assessing Officer debts could not be written off in accounts of the assessee as the claim is made after accounts of the assessee are audited and finalized. He further observed that the action of the assessee Bank appears to be an after thought exercise to reduce tax liability. Thus, the Assessing Officer disallowed assessee's claim of bad debts written off of erstwhile AFL to the tune of Rs. 49,62,08,864/-. The Assessing Officer has also disallowed assessee's claim of write off of fees amounting to Rs. 62,09,66,661/-. Thus, the Assessing Officer made addition made in respect of bad debts written off aggregating to Rs. 769,57,10,766/-. Aggrieved by the addition made in assessment order dated 28/02/2006, the assessee carried the issue in appeal before CIT(A). The CIT(A) following the order of his predecessor in assessment years 2000-01, 2002-03 and 2004-05 deleted the addition, summarily. 5. Shri P.C. Chhotaray representing the Department made exhaustive submissions assailing the findings of CIT(A) in respect of bad debts written off . The Ld. Departmental Representative submitted that the assessee has failed to substantiate that the bad debts written off had indee....
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....by the assessee was not prudent and was taken in haste to suppress the taxable income. The various arguments raised by ld. Departmental Representative in respect of other companies is summed up as under:- - The assets were expensive and valuable. - Loan secured against assets and guarantees. - Debts assigned to ARCIL. - Debts written off casually and in an arbitrary manner without justification. - No evidence to show that the debts had become bad. 8. In respect of bad debts written off of erstwhile AFL, the ld. Departmental Representative submitted that the assessee made claim of write off of bad debts to the tune of Rs. 49.62 crores of erstwhile AFL in the revised return. The claim was made after the accounts of the Bank were audited u/s. 44AB of the Act. The Auditors had not made any observation that the amounts were written off in the accounts as irrecoverable. The details of expenses does not indicate that the bad debts written off have been debited to P&L Account. The Assessing Officer has categorically observed that there is nothing to show that such huge amount of debts involving such a large number of parties is a bad debt. Th....
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....ts was explained to the Assessing Officer. The ld.Counsel for the assessee referred to letter dated 20/01/2006 at page 1 of the Paper Book. She pointed that debts were written off as bad debts due to continuous default in payment of dues by the borrowers for various reasons viz. project overruns, substantial cost escalations, pressure on liquidity leading to non-payment of wages or statutory dues, continued cash losses for more than one year, negative networth, unrealizable securities, stagnation in business, adverse market conditions, etc. She submits that before writing off the amounts as irrecoverable the assessee Bank makes an evaluation of individual borrower's account. There is a bonafide assessment of each borrower. Wherever loans become bad, either suit is filed before the Debt Recovery Tribunal or winding up petitions are filed before Hon'ble Court. Where loans are advanced for larger projects, the assessee bank was part of the consortium of lenders, the loan is secured by the assets and in case of default or where the situation arises leading to sale of assets, the assessee gets is prorate share as part of consortium. She further submitted that even if the loans are s....
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....following decisions: (i) TRF Ltd. vs. CIT , 230 CTR 14 (SC) (ii) Vijaya Bank vs. CIT, 323 ITR 166 (SC) She further referred to the order of Tribunal in assessee's own case for the Assessment Year 2004-05 and 2005-06, wherein the Tribunal had restored the issue back to the file of Assessing Officer in light of decision in the case of Vijaya Bank (supra). In the order giving effect, the Assessing Officer fully allowed bad debt written off by the assessee. The ld.Counsel for the assessee further referred to CBDT Circular No. 12/2016 dated 30/05/2016. She submitted that CBDT referred to the decision in the case of TRF(supra) and clarified that claim of any debt or part thereof in any previous year shall be admissible u/s. 36(1)(vii) of the Act, if it is written off as irrecoverable in the books of account of the assessee for that previous year and it fulfills the conditions stipulated in sub-section (2) of section 36 of the Act. She emphasized that CBDT Circular has clarified that no appeals are to be filed by the Department on this ground and appeals filed may be withdrawn/not pressed. 15. We have heard the submissions made by rival sides and have examined ....
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....ostly for the reason that the debt has not been established to be irrecoverable. The Hon'ble Supreme Court in the case of TRF Ltd. In CA Nos. 5292 to 5294 of 2003 vide judgment dated 9.2.2010, has stated that the position of law is well settled. "After 1.4.1989, for allowing deduction for the amount of any bad debt or part thereof under section 36(1)(vii) of the Act, it is not necessary for assessee to establish that the debt, in fact has become irrecoverable; it is enough if bad debt is written off as irrecoverable in the books of accounts of assessee" 4. In view of the above, claim for any debt or part thereof in any previous year, shall be admissible under section 36(l)(vii) of the Act. if it is written off as irrecoverable in the books of accounts of the assessee for that previous year and it fulfills the conditions stipulated in sub section (2) of sub-section 36(2) of the Act. 5. Accordingly, no appeals may henceforth be filed on this ground and appeals already filed, if any, on this issue before various Court/Tribunals may be withdrawn/not pressed upon." 17. The main plank of arguments by the ld. Departmental Representative is that the assessee has fa....
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.... Rs. 1.13 crores. Hence, on redemption of units the assessee was paid back lesser amount to the extent of losses. Hence, the assessee claimed the losses of Rs. 141.18 crores as per the provisions of section 115U of the Act. The assessee had furnished details in the prescribed Form No. 64 in respect of the gains and losses from the venture capital fund. The Assessing Officer selectively rejected assessee's claim of losses from ICICI Information Technology Fund Rs. 140.05 and ICICI Technology Incubator Fund Rs. 1.13 crores. The CIT(A) after examining the details furnished by the assessee allowed the claim. 20. We have heard the submissions made by rival sides and have examined orders of authorities below. A perusal of documents on record reveals that the assessee had furnished audit report in Form No. 64 before the Assessing Officer. The audit report in Form -64 for ICICI Information Technology Fund is at pages 48 to 56 of the paper book and audit report in Form-64 for ICICI Technology Incubator Fund is at page-57 to 63 of the paper book. The CIT(A) has given a categoric finding that the Assessing Officer has selectively considered Form -64 furnished by the assessee for respective....
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....oduced herein below" "21. We have heard rival contentions and perused the material available on record. Learned Counsels appearing for both the parties have agreed before us that the issue is covered by the decision of the Tribunal in the preceding assessment years. Notably, in assessment year 2000-01, the Tribunal while deciding identical issue in ITA No. 4657/Mum./2004 and ITA No. 4826/Mum./2004, dated 31st January 2017, has restored the matter back to the file of the Assessing Officer for considering afresh. In fact, in assessment year 2002-03 also in assessee's own case, the Tribunal while deciding identical issue in ITA No. 836/Mum./2008 and ITA No. 392/Mum./2008 dated 7th July 2017, has restored the issue to the Assessing Officer for considering afresh keeping in view the directions of the Tribunal in the preceding assessment year. Therefore, consistent with the view expressed by the Tribunal in the preceding assessment year as referred to above, we restore the issue to the file of the Assessing Officer for considering afresh with similar direction and only after reasonable opportunity of being heard to the assessee. Ground No. 4, raised by the Revenue is allowed for....
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....t page F-4 and F-10 of the paper book. She further referred to the Tribunal order in assessee's own case for Assessment Year 2004-05 and 200506, wherein disallowance made u/s. 14A was deleted. 26. We have heard submissions made by rival sides and have examined orders of authorities below. The assessee has earned income exempt from tax u/s. 10(23G) of the Act to the tune of Rs. 520.11 crores. The breakup of exempt income is as under: (i) Interest income Rs. 408.63 crores. (ii) Guarantee Commission Rs. 6.16 crores (iii) Fee income Rs. 13.01 crores (iv) Future Interest Flow Rs. 93.30 crores Total Rs. 520.11 crores The Assessing Officer proportionately allocated the expenditure to the gross receipts in earning tax free income and made addition of Rs. 70.90 crores. The Assessing Officer further made addition of Rs. 9.95 crores in respect of income exempt from tax u/s. 10(15) of the Act. We find that similar issue had come up for consideration before the Co-ordinate Bench in assessee's own case in appeal by the Revenue for Assessment Year 2004-05 in ITA No. 6137/Mum/2008. The Tribunal decided the issue as under: "7. We have further noted t....
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....and CIT v/s HDFC Bank Ltd., [2014] 366 ITR 505 (Bom.). As far as disallowance of administrative expenses is concerned, it is the contention of the assessee that in the preceding assessment year, it has voluntarily disallowed 1% of the administrative expenditure attributable to earning of exempt income. However, we have noted, in assessment year 2001-02, the Tribunal while deciding the issue in Revenue's appeal being ITA No. 393/Mum./ 2008, dated 2nd March 2016, has restored the issue to the Assessing Officer for considering afresh. In view of the aforesaid, we are inclined to restore the issue to the file of the Assessing Officer for deciding afresh keeping in view the directions of the Tribunal in the preceding assessment year. Thus, ground No. 2, raised by the Revenue corresponding to ground No. 3, raised by the assessee are allowed for statistical purposes." The facts in the present appeal being similar to Assessment Year 2004-05, we see no reason to take a contrary view. The grounds No. 4, 5 & 7 are allowed for statistical purposes in similar terms. 27. In ground No. 6 of appeal, the Revenue has assailed the findings of CIT(A) in deleting addition of depreciation on lease....
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....f the appeal is dismissed being devoid of any merit. 30. In ground No. 8 of appeal, the Revenue has assailed the findings of CIT(A) in deleting notional interest for the purpose of determining annual value u/s. 23(1)(a) of the Act. The ld. Departmental Representative submitted that the assessee has received deposit against let out property. The notional interest on account of deposit has been considered by the Assessing Officer for arriving at the annual value under section 23(1)(a) of the Act. The Assessing Officer has made the addition by following the order of Tribunal in the case of Tivoli Investment& Trading Co. Pvt. Ltd. vs. ACIT, 90 ITD 163 (Mum). The ld.Counsel for the assessee supporting the order of CIT(A) stated that only the actual rent received or receivable has to be taken into consideration and not the notional value. The CIT(A) has deleted the addition by following earlier orders. The ld.Counsel for the assessee further placed reliance on the order of Tribunal in its own case for Assessment Year 2004-05 and the decision of Hon'ble Bombay High Court in the case of CIT vs. Tip Top Typography, 368 ITR 330 (Bom). 31. Both sides heard. We find that in assessee'....
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....elines issued by the RBI from time to time. Further, it is evident from the annual report of the assessee that acquisition of assets including performing and non-performing asset are as per the prescribed guidelines of RBI. That being the case, there is no reason for the Assessing Officer to presume that the assessee is not qualified to exercise option under the first proviso. Further, as per the second proviso to section 36(1)(viia) of the Act for the assessment year commencing on/or after 1st April 2003 and ending before 1st April 2005, the deduction allowable in terms of proviso 1 to section 36(1)(viia) of the Act is 10% instead of 5%. In view of the above, we do not find any infirmity in the order of the learned Commissioner (Appeals) on this issued. Accordingly, we uphold the order of the learned Commissioner (Appeals) by dismissing ground No. 10 raised by the Revenue." No contrary material has been placed before us to distinguish the order of Tribunal in assessee's own case on this issue for Assessment Year 2004-05. In the absence of any contrary material we see no reason to take a different view. Thus, following the decision of Co-ordinate Bench in assessee's own case....