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2021 (12) TMI 1313 - ITAT BANGALORETDS u/s 194J - NFS – ATM Charges paid - disallowance made u/s 40(a)(ia) for non-deduction of tax at source on payments fall under the category of technical services - HELD THAT:- Following the above said decision of co-ordinate bench rendered in the case of Canara Bank [2022 (1) TMI 124 - ITAT BANGALORE], we hold that the payments made to NPCI towards NFS ATM charges cannot be considered as “technical services” within the meaning of sec.194J of the Act. Hence there is no liability to deduct tax at source from those payments. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the disallowance. Applicability of sec.115JB on banking company - case of the assessee is that clause (b) of sec.115JB(2) is made applicable to banking companies, since banking company is included in sec. 211 of the Companies Act. However, it is the contention of the assessee that it is not a ‘banking company”, i.e., it is a “corresponding new bank” - HELD THAT:- As decided in M/S. CANARA BANK (ERSTWHILE SYNDICATE BANK) VERSUS DEPUTY COMMISSIONER OF INCOME-TAX CIRLE-1 UDUPI AND (VICE-VERSA) [2022 (1) TMI 124 - ITAT BANGALORE] provisions of sec.51 of the Act specifically states that only certain provisions of BR Act are applicable to “Corresponding new bank”. We noticed earlier that the Ld CIT(A) has proceeded to decide this issue by observing that all provisions of BR Act are applicable to the Company. We notice that the Ld CIT(A) did not consider the effect of provisions of sec.51 of the BR Act upon the assessee. Hence the decision taken by him under the impression that all the provisions of BR Act are applicable to the assessee is faulted one. In our view the Ld CIT(A) should considered the effect of provisions of sec. 51 of BR Act and accordingly he should have appreciated the contentions of the assessee on the definition of “banking company”, provisions of sec.211(2) of the Companies Act etc. Since these aspects go to the root of the issue, in our view, this issue needs to be examined at the end of Ld CIT(A) afresh. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore the same to his file for examining it afresh. Disallowance of bad debts claimed u/s 36(1)(vii) - HELD THAT:- We notice that the Ld CIT(A) has followed the decision rendered by the co-ordinate bench in the assessee’s own case [2018 (1) TMI 1575 - ITAT BANGALORE] and deleted the disallowance of bad debts claimed by the assessee u/s 36(1)(vii) of the Act. Accordingly, we do not find any reason to interfere with his order passed on this issue. Disallowance of depreciation on HTM Securities - AO took the view that the RBI has allowed banks to claim depreciation on securities which are “Held for Trade” and “Available for sale” only thus he held that the depreciation is not available on securities “Held to Maturity - CIT-A deleted the addition - HELD THAT:- As decided in own case [2018 (1) TMI 1575 - ITAT BANGALORE] depreciation claimed on investments 'held on maturity' by a bank has to be treated as stock-in- trade in accordance with RBI guidelines and CBDT Circular. Disallowance made u/s 14A - HELD THAT:- We notice that the co-ordinate benches have decided this issue prior to rendering of decision by Hon’ble Supreme Court in the case of Maxopp Investment Ltd [2018 (3) TMI 805 - SUPREME COURT] However, before us, the Ld A.R relied upon certain other decisions in order to contend that no disallowance u/s 14A is called for. In view of the subsequent development of law on this issue, in our considered view, this issue requires fresh examination at the end of AO by duly considering the various decisions on the subject. Accordingly, we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of AO for examining it afresh.
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