TaxTMI 
TaxTMI 
2026 (1) TMI 7
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....ppeal: "1. Whether on the facts and under the circumstances of the case, the Ld. CIT(A) has erred in law and the facts in deleting the disallowance of Rs. 5.61 lakh made by the Assessing Officer without appreciating the facts that assessee has not submitted the basis of payment of interest in respect of the Fixed Deposit. 2. Whether on the facts and under the circumstances of the case, the Ld. CIT(A) has erred in law and the facts in deleting the disallowance of Rs. 22.45 crores made by the Assessing Officer u/s 14A r.w.r. 8D by ignoring the mandatory provisions of sub rule 8D r.w.s. 14A of the Income-tax Act 1961. 3. Whether on the facts and under the circumstances of the case, the Ld. CIT(A) has erred in law and the facts in allowing 100% depreciation of Rs. 21.46 Cr claimed by the assessee on temporary erections as against @ 10% and @ 5% for less than 180 days allowed by the Assessing Officer that the erection and fixtures mentioned above have longer life than one year and of enduring benefit to the assessee company as held by the Hon'ble Apex Court in the case of Madras Industrial Corporation vs. CIT 225 ITR 802." 4. Whether on the facts ....
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....Cr/ made on account of software expenses treating it as revenue expenditure instead of expenses incurred are as 'capital in nature without appreciating the facts that these expenses are in the nature of capital and result in enduring benefit. 11. "Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the disallowance made by the Assessing Officer on account of disallowance of deduction claimed in respect of provision for NPI of Rs. 153.23 Cr by ignoring the facts that assessee does not fulfill/eligible the condition mention in RBI Circular." 4. We advert to the first and foremost issue between the parties wherein the learned CIT(A) has reversed the Assessing Officer's action disallowing assessee's claim of interest payment amounting to Rs. 5,61,297/-; vide following detailed discussion: "FINDING 4.2 The submissions of the appellant are considered carefully along with the facts of the case. The AO has made the addition essentially based on the information he had that the entity during its assessment proceedings under section 143(3) for A.Y. 2013-14 had denied having any such fixed deposit account with the assessee ....
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....decision dated 13th September, 2023 (AYs 2013-14 to 2015-16) in assessee's case(s) has made it clear that the impugned disallowance provision in section 14A read with Rule 8D itself does not apply in an instance involving investments held as stock in trade in light of Maxopp Investment Ltd. Vs. CIT (2018) 402 ITR 640 (SC). We thus adopt judicial consistency to reject the Revenue's instant second substantive ground in very terms. Ordered accordingly. 7. The third substantive issue between the parties herein is that of disallowance of Rs. 21,46,25,828/- involving depreciation on temporary wooden structures wherein the learned Assessing Officer had held the same to be fall ceiling(s), wooden partition(s), and glass windows etc. only. The Revenue could hardly dispute that the assessee has already succeeded on the very issue in ITA No.740/Del/2020 for AY: 2016-17, dated 31st March, 2023 before the tribunal. We thus adopt judicial consistency herein as well in the assessee's favour since the impugned assets form part of the very block of assets all along. Rejected accordingly. 8. The Revenue's fourth substantive ground raised in the instant appeal is that the CIT(A)/NFAC has erred ....
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....evive the impugned inter-office adjustment disallowance. Rejected accordingly. 10. The Revenue's fifth substantive ground herein seeks to revive the Assessing Officer's action disallowing the assessee's software expenditure of Rs. 14,06,86,873/- which stands reversed in the CIT(A)/NFAC's lower appellate discussion. 11. The Revenue seeks to buttress the point before us that the Assessing Officer had rightly treated the same as an instance of capital expenditure than revenue in nature. It could hardly dispute that the assessee has already succeeded on the very issue in the preceding assessment year 2016-17 (supra) wherein no distinction on facts or law, as the case may be, is forthcoming from the records. We accordingly uphold the learned lower appellate authority's action treating the assessee's software charges as revenue expenditure items in very terms. 12. Next comes the sixth substantive issue between the parties regarding allowability of assessee's section 36(1)(viia) deduction claim of Rs. 1258,11,97,648/- made by the Assessing Officer and deleted in the lower appellate discussion, as under: "FINDING 11.2 The submissions of the appellant are consider....
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....st day of April, 2005; (b) a bank, being a bank incorporated by or under the laws of a country outside India, an amount not exceeding five per cent of the total income (computed before making any deduction under this clause and Chapter VI-A); (c) ............................. (d)............................ Explanation. For the purposes of this clause,- (1) "non-scheduled bank" means a banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled bank; (ia) "rural branch" means a branch of a scheduled bank or a non- scheduled bank situated in a place which has a population of not more than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year; (ii) "scheduled bank" means the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959*), a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Und....
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....g census of which the relevant figures have been published before the first day of the previous year. The requirement in this regard is with respect to the last census that has taken place and whose figures have been published before the relevant previous year starts, and not the census figures published on the first day of the relevant previous year as surmised by the AO. To illustrate, if a village had total population of not more than 10,000 in the last census whose figures were published prior to 01.04.2016, the branch therein would be classified as "rural branch" for the relevant A.Y. 2017-18. 11.5 It has been asserted by the appellant that it classifies its branches as per RBI master circular dated July 1, 2014 updated on September 1, 2016, the copy of which was filed before the AO. It is also seen that the claim is further supported by the certificate of auditors, filed before AO, who have clearly stated that they have verified in terms of provisions of Rule 6ABA and have certified, after verification of the books of accounts and the advances pertaining to the rural branches, 10% of the aggregate average rural advances. 11.6 The insistence of the AO to subm....
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.... of Rs. 729,44,85,300/- being provision for bad and doubtful debts and disallowed Rs. 114.51 cr. on the ground that reserve for bad and doubtful debts cannot be considered as provision. Reference is invited to page 13, para 8 upto page 19, para 8.4.3. 17. This issue is covered by the order of the Co-ordinate Bench of ITAT in assessee's own case for the A.Y. 2011-12 in ITA No.644/Del/2014 and ITA No.5969/Del/2014 vide order dated 25.10.2017. The operative part of the order is reproduced as under: "12 We find that the computation made in terms of section 36(1)(viia) gives the total amount of deduction at Rs. 637,56,78,375/-, which fact has not been disputed also. However, the Id. CIT(A) restricted the addition to the tune of Rs. 488.39 crore on the ground that the total amount of provision for bad and doubtful debts in respect of rural branches is only to this extent and, hence, deduction cannot exceed it. We are not agreeable with the view canvassed by the Id. CIT(A) in view of the language of section 36(1) (vila) which opens with the expression that: "in respect of any provision for bad and doubtful debts made by ......" It is amply clear from the language of ....
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.... The Central Board of Direct Taxes (CBDT) vide notification no. SO 3079(E) (No. 87/2016] dated 29.09.2016 has issued revised ICDS making it compulsory for all assesses following mercantile system of accounting to follow the standards for the purpose of computation of income under the head profits & gains of business and income from other source with effect from A.Y. 2017-18. The Income Computation and Disclosure Standard VIII (ICDS VIII) is relating to securities. Part B of the ICDS VIII deals with securities held by a scheduled bank or public financial institutions formed under a Central or a State Act or so declared under the Companies Act, 1956 (1 of 1956) or the Companies Act, 2013 (18 of 2013). In respect of securities ie, depreciation on investments, amortization of premium on HTM securities, profit/loss on sale of investments, ICDS-VIII part B, clause (3) provides - "securities shall be classified, recognized and measured in accordance with the extent guidelines issued by RBI in this regard and any claim for deduction in excess of the said guidelines shall not be taken into account. To this extent, provisions of income computation and disclosur....