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2016 (7) TMI 1413 - AT - Income TaxRevision u/s 263 - as per CIT-A section 36(1)(viia)(a) applies only to rural advances and since the assessee’s bank was not having any rural branch, deduction allowed u/s 36(1)(viia)(a) was not in order - Held that:- The judgment of the Hon’ble Supreme Court in the case of Catholic Syrian Bank Ltd (2012 (2) TMI 262 - SUPREME COURT OF INDIA) relied by the CIT while invoking his revisionary jurisdiction does not apply to the facts of the present case. The CBDT in Clause 5 of its Circular No.464 dated July 18, 1986 referred to by the Hon’ble Apex Court in Catholic Syrian Bank's case makes it very clear that the two deductions provided in clause (viia)(a), viz. 7.5% of the total income (computed before making any deduction under this clause and Chapter VIA) and 10% of the aggregate average advances made by the rural branches are distinct and independent. The intention of the legislature was to give the benefit of deduction of 7.5% of the total income to the scheduled, non-scheduled and co-operative banks under clause (viia) while a similar benefit of deduction of a specified percentage of the total income was extended to the foreign banks and public financial institutions under clauses (viia) (b) and (viia)(c) respectively, apart from the benefit available to them under clause (vii). The proposal to deny the benefit of the first part of clause (viia)(a) to the assessee linking it to rural advances would therefore subvert the legislative intent. - Decided in favour of assessee.
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