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2015 (12) TMI 1747 - ITAT PUNEDeduction under section 36(1)(viia) - allowability of provision made on account of Standard Assets - Held that:- The issue arising before us is identical to the issue before the Tribunal in The Cosmos Co-op. Bank Ltd. Vs. DCIT (2014 (1) TMI 1696 - ITAT PUNE) as held the impugned claim is a contingent Provision made on the basis of a percentage on the value of standard assets. The Provision does not reflect any particular debt which is doubtful or bad and it is only a general and non-specific Provision and it has been rightly classified as a contingent provision by the income-tax authorities. In-fact, the learned counsel for the assessee, at the time of hearing, fairly conceded the contingent nature of the provision and therefore the lower authorities made no mistake in disallowing the same. Thus following the same parity of reasoning, we uphold the order of CIT(A) and confirm the addition. Disallowance of depreciation on computer and software purchased - Held that:- In view of the admission of the assessee and in the absence of any details having been furnished as to the date when the said items were put to in use, which in turn were purchased on 30.03.2007, we uphold the order of CIT(A) in denying the deduction on account of depreciation on the said items of computer expenses. Further, two of the items have been purchased in the succeeding year i.e. on 28.04.2007 and 30.06.2007. No depreciation on the said items is allowable in the hands of the assessee during the instant assessment year. Coming to the balance items purchased by the assessee which were held to be capital expenditure by the Assessing Officer and the addition was made to that extent in the hands of assessee, the assessee has revised its claim in respect of the same that the depreciation on such capital expenditure should be allowed in the hands of assessee. We find merit in the plea of the assessee in view of the evidence furnished on record in respect of the said assets being purchased in the months of November, 2006 and February, 2007 and once the asset has held to be capital in nature, depreciation on the same as per law, is allowable. We find merit in the plea of the assessee and accordingly, direct the Assessing Officer to allow depreciation on balance asset Nos.5 to 10 totaling ₹ 12,79,240/-, The ground of appeal No.2 raised by the assessee is thus, partly allowed. Non-allowance of loss on sale of securities - Held that:- The nomenclature of the head under which the securities are held are not decisive for the assessee bank, hence, the loss arising on sale of securities was revenue in nature and the same was allowable. We find merit in the reliance placed upon by the learned Authorized Representative for the assessee and the issue arising before us is squarely covered by the ratio laid down by the Tribunal in Latur Urban Co-op Bank Ltd. Vs. DCIT (2015 (3) TMI 920 - ITAT PUNE). Following the same parity of reasoning, we hold that loss of ₹ 235.66 lakhs is allowable in the hands of the assessee. Disallowance on account of commission paid to Pigmy deposit agents u/s 40(a)(ia) - Held that:- In view of the second proviso to section 40(a)(ia) of the Act, where the payee has paid the taxes, the issue may be sent back to the Assessing Officer for confirmation. Claim of deduction under section 36(1)(viia) - assessee has re -worked the deduction to be allowed to it at ₹ 18,03,42,000/-, which admittedly is not allowable in the hands of the assessee, since no provision to that extent was made - Held that:- We find support from the ratio laid down by the Pune Bench of Tribunal in Shri Mahalaxmi Co-op. Bank Ltd. Vs. ITO (2014 (1) TMI 1366 - ITAT PUNE) and in view of the concession of both the Authorized Representatives before us, we dismiss the additional ground of appeal No.1 raised by the assessee. Recognition of interest accrued on NPAs - Held that:- The Hon’ble Bombay High Court in CIT Vs. M/s. Deogiri Nagari Sahakari Bank Ltd. [2015 (1) TMI 1218 - BOMBAY HIGH COURT] has laid down the proposition that the interest accrued on NPAs is not taxable in the hands of assessee, in view of the guidelines issued by the RBI. TDS u/s 194A - addition u/s 40(a)(ia) - whether the provisions of section 40(a)(ia) of the Act are attracted to an expenditure, which was not payable at the close of the year - Held that:- . The Pune Benches of Tribunal have consistently taken view that the said provisions are attracted irrespective of the expenditure being paid during the year and nothing being payable at the close of the year. Hence, where the assessee had made payment on account of interest expenditure to which the provisions of section 194A of the Act are applicable, the onus was upon the assessee to deduct TDS and in absence of the same, the said expenditure is liable to the disallowed in the hands of assessee, in view of the provisions of section 40(a)(ia) of the Act. We uphold the order of CIT(A) in this regard. Second proviso to section 40(a)(ia) inserted by the Finance Act, 2012 - Held that:- We deem it fit to restore the matter back to the file of Assessing Officer, who shall consider the plea of the assessee based on the provisions of the Act inserted by the Finance Act, 2012 w.e.f. 01.04.2013 and in line with earlier order of the Tribunal dated 06.01.2014 Depreciation on expenditure incurred on computers and software purchased in earlier years - Held that:- We find merit in the plea of the assessee, in view of the order passed in assessment year 2007-08, wherein, certain expenditure incurred by the assessee was capitalized. The Assessing Officer is directed to allow the depreciation on the items capitalized in assessment year 2007-08 on which directions have been given to allow the depreciation.
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