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2012 (6) TMI 772 - AT - Income TaxRevision u/s 263 - additions on account of write back of stale demand drafts to the Profit & Loss account which was done as per the direction of Reserve Bank of India - Held that:- In the instant case, as mentioned earlier, the Reserve Bank of India had categorically directed that the amounts are to be kept in general reserve account though routed through the profit and loss account. It is the direction of the RBI that the assessee bank is under an obligation to meet the future claims out of General Reserve so created. The RBI had also stipulated that the amounts so transferred shall not be used in the form of distribution of dividend. In this context of the matter, it cannot be said that it is the money of the assessee bank. The RBI instructions are issued as per section 35A of the Banking Regulation Act, 1949 and the same are binding on the assessee bank. Therefore, though it is routed through the profit and loss account, it does not have income character in the hands of the assessee bank and hence, it cannot be brought to tax. Accordingly, the CIT’s order invoking revisionary jurisdiction under section 263 of the Act directing the Assessing Officer to assess an amount of ₹ 52.77 crores is not justified and therefore, is quashed to that extent. It is ordered accordingly. - Decided in favour of assessee.
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