TMI Blog2019 (4) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income Tax [2011 (1) TMI 1184 - KERALA HIGH COURT]. Hence the question is answered against the assessee and in favour of the revenue. Exemption 10(23G) - HELD THAT:- it is only proper that the Assessing Officer considers the certificates produced by the assessee and grant allowance to the extent the claim is substantiated. Revaluation of Interest Rates Swaps (IRS) - interest rates fluctuations in the market - HELD THAT:- lower authorities have taken a view that it is only a notional revaluation and there can be no deduction allowed for the same. We confirm the order of the lower authorities and answer the question against the assessee and in favour of the revenue. Addition u/s 14A - HELD THAT:- Issue against the revenue and in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndran, J . The appeals arise from the assessment year 2006-07 and raises question of law from the common order of the Tribunal, which disposed of the assessee's appeal and the revenue's appeal. The questions of law raised are as follows: 1. Whether on the facts and in the circumstances of the case the Appellant is entitled to deduction of the bad debts written off relating to urban branches in full and bad debts written off relating to rural branches to which clause (viia) applies to the extent of the amount by which such debt or part thereof exceeds the credit balance in provision for bad doubtful debts made in respect of such debt under Section 36(1)(viia). 2. Whether there were any material on record to ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 36(1)(viia) and the amount of Provision of Doubtful Debts reduced from the Loans and Advances /Debtors on the asset aside of the Balance Sheet as held by the Hon'ble Supreme Court in Vijaya Bank's case in 323 ITR 166 . 2. The first question arises, insofar as the provision for bad debts written off. The Tribunal has remanded the matter, directing the Assessing Officer to re-consider the issue based on the Full Bench decision of this Court in Commissioner of Income Tax v. South Indian Bank Ltd. [(2010) 326 ITR 174(Ker)(FB)] . As of now, the Full Bench decision has been overruled by the Hon'ble Supreme Court and the decision reported in Catholic Syrian Bank Ltd. v. Commiss ioner of Income Tax, Thrissur [(2012) 3 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch refers to interest rates fluctuations in the market. The lower authorities have taken a view that it is only a notional revaluation and there can be no deduction allowed for the same. We confirm the order of the lower authorities and answer the question against the assessee and in favour of the revenue. 7. The fifth question is covered against the revenue and in favour of the assessee in C.I.T. v. Essar Teleholdings Pvt.Ltd. [(2018) 401 ITR 445 (SC)] . It has been held by the Hon'ble Supreme Court that the machinery provision for giving effect to Section 14A of the Income Tax Act came into effect only from the assessment year 2008-09. Hence, there can be no application of Section 14A to the subject year. The question is ans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation in an area as demarcated by the assessee Bank. The Assessing Officer hence rightly computed 10% of aggregate advances at ₹ 3,27,15,858/-. Thus, a total amount of ₹ 45,30,81,080/- was arrived at; eligible for deduction. The provision created being ₹ 97,03,05,677/-. There was a disallowance of ₹ 51,72,24,597/-, which was added back as income. 10. The specific contention raised by the learned Senior Counsel for the assessee Bank is that, in fact, the assessee had written off the said amounts and hence there could be a deduction claimed under Section 36(1)(vii) itself. For the above proposition, the learned Senior Counsel relies on Vijaya Bank v. Commissioner of Income-Tax and Another [(2010) 323 ITR 166( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans and advances/debtors on the assets side of the balance-sheet and, consequently, at the end of the year, the figure in the loans and advances or the debtors on the asset side of the balancesheet was shown as net of the provision for the impugned bad debt ........ 12. The procedure as prescribed therein would also be a write off. It is the contention of the assessee Bank that the assessee had actually written off the amounts as has been found in Vijaya Bank (supra). In such circumstances, it is only proper that the Assessing Officer verify the Balance Sheet of the assessee, produced for the year and decide the question of deduction under Section 36(1)(vii)of the Act, in consonance with Vijaya Bank (supra) and the declaration ..... X X X X Extracts X X X X X X X X Extracts X X X X
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