TaxTMI 
TaxTMI 
2017 (10) TMI 1677
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....iled its revised return of income on 29-09-2009 declaring total income as Nil. The income returned by the assessee was accepted by Assessing Officer vide order dated 11-102010 passed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). Thereafter, assessment was reopened and notice u/s. 148 of the Act was issued to the assessee on 18-03-2013. In reassessment proceedings, the Assessing Officer disallowed assessee's claim of deduction u/s. 36(1)(viia) of the Act Rs.53.33 crores. The Assessing Officer held that computation of deduction u/s. 36(1)(viia) by the assessee is not as per the provisions of said section read with Rule 6AB of the Income Tax Rules, 1962. Aggrieved by the assessment order dated 12-03-2014 pa....
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.... cannot take the benefit of same outstanding rural advances during assessment year under appeal i.e. assessment year 2008-09. The manner in which the assessee has computed deduction u/s. 36(1)(viia) amounts to double deduction. The ld. DR prayed for reversing the findings of Commissioner of Income Tax (Appeals) and restoring the addition made by Assessing Officer in respect of assessee's claim of deduction u/s. 36(1)(viia) of the Act. In support of his submissions the ld. DR placed reliance on the decision of Chennai Bench of Tribunal in the case of Indian Overseas Bank Vs. Dy. Commissioner of Income Tax in ITA Nos. 496 & 497/Mds/2015 for assessment years 2010-11 and 2011-12 decided on 23-02-2016. 4. On the other hand Shri M.R. Shirude a....
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....he relevant extract of the Rules are reproduced here-in-below: "For the purposes of clause (viia) of sub-section (1) of section 36, the aggregate average advances made by the rural branches of a scheduled bank shall be computed in the following manner, namely:- (a) the amounts of advances made by each rural branch as outstanding at the end of the last day of each month comprised in the previous year shall be aggregated separately; (b) the sum so arrived at in the case of each such branch shall be divided by the number of months for which the outstanding advances have been taken into account for the purposes of clause (a) ; (c) the aggregate of the sums so arrived at in respect of each of the rural branche....
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....g Officer should verify whether the branch (es) in question actually qualify to be categorized as 'rural branches' as per the definition in Explanation (ia) below section 36(1)(viia). The aggregate average advances of such rural branches should thereafter be computed in accordance with Rule 6ABA of IT. Rules, 1962." Thus, from a bare perusal of Rule 6ABA and CBDT Instructions it is unambiguously clear that outstanding amount of advances by 'rural branches' of the bank at the end of each month has to be computed on aggregated average advances and not advances of the month. 7. We further find support from the decision of Hyderabad Bench of the Tribunal in the case of Nizamabad District Cooperative Central Bank Ltd. Vs. Income Tax Of....