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2012 (8) TMI 1006 - AT - Income TaxDeduction u/s.80P(2) - Held that:- AO observed that this deduction cannot be claimed without filing a revised return. Neither in the original return nor in the revised return the assessee claimed deduction u/s.80P(2). Therefore, he disallowed the deduction u/s.80P(2). Without prejudice to this, AO also took the view that the principal object of the assessee bank is to finance co-operative societies in Jamnagar district affiliated to bank and generally to carry on banking business. One of the objects (clause vii) is to advance loans to agriculturist admitted as ordinary or nominal member, the principal object therefore cannot be said to provide for long term credit to agriculturist and rural development. Therefore, the assessee is not entitled to deduction u/s.80P(2). Deduction claimed u/s.36(1)(viia) - Held that:- It can be made from profit of earlier years as ultimately the profit is transferred to reserve account. Admittedly, the assessee has made provision in the books of account of this year which has been duly audited by the authorized auditor. As per provision contained in sec.36(1)(vii) read with Rule-6ABA, the provisions for bad and doubtful debt are allowable to the extent mentioned in this section. Before the AO, the assessee has not furnished the working. Same was furnished before the ld. CIT(A). We therefore, set aside the order of ld. CIT(A) and direct him to verify the working submitted before the ld. CIT(A) and allow the deduction u/s.36(1)(viia) in respect of provisions for bad and doubtful debts whether from the current year profit or from the earlier year’s profit after verifying the calculation and allow the same. Disallowed the overdue interest reserve - Held that:- It is pertinent to note that AO has not considered the fact that overdue interest amounting to ₹ 1,15,00,000/- which is credited into profit and loss account was debited as per RBI guidelines and there is no ultimate credit in P/L. A/c. in this respect. Thus, there is no income accrued and no addition on this account can be made. Distribution of gift by assessee-Co-operative Society to its member at AGM is allowable as business expenditure
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