TaxTMI 
TaxTMI 
2023 (3) TMI 1614
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....not pressed. 3. Ground No. 4 raised by the assessee challenging the action of CIT(A) in confirming the disallowance made by the AO u/s. 36(1)(viia) of the Act. 4. We note that the assessee created provision of Rs. 33,90,000/- towards standard assets. According to the AO, the said provision is not reflected in the computation of income. It was explained that the assessee is required to account for provision for NPA i.e. provision for bad and doubtful debts. The said item is nothing but provision for standard, substandard and doubtful debts as per the regulation of Reserve Bank of India. The said explanation was found not acceptable by the AO and the same was added to the total income of the assessee. The CIT(A) confirmed the same. 5....
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....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 appearing on behalf of the assessee vehemently defended the order of Commissioner of Income....
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...."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 branches shall be the aggregate average advances made by the rural branches of ....
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....ualify 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 Officer (supra) wherein it has been held that 10% of aggregate a....